Scott Bessent

Another 17% was caused by the increase in inflation expectations, which I think you could tie back to that.

So you've got almost 60%, David, that was caused by the spending of the inflation.

And I think, again, to go back to my earlier point, I think what we're not getting credit for here is that if we can

stabilize the budget deficit, even bring it down, that that will contribute to disinflation.

If I think about central bank credibility, in my career, probably post World War II, no central bank had more credibility than the Bundesbank up until the advent of the Euro, but they controlled, they worked with the German government and they would work with each other hand in hand

the Bundesbank would say, if you give us the fiscal control, if you give us, if you are not prolificate, if you give us

the reasonable fiscal balance, we will work with you, we will foam the runway to allow you to decrease spending, we will decrease interest rates.

And I think that's something we could be doing here.

Yeah.

So there's a lot to unpack there that absolutely large scale asset purchases should be part of the so-called central bank toolkit.

But I think if we go back and look at COVID, which was a real test, the Bank of England had the best model.

The markets became unhinged.

They stepped in for a period.

I can't remember whether it was 30, 60 or 90 days.

They stabilized markets and they were the buyer of last resort, which is classic theory for what a central bank is supposed to do.

They're supposed to provide liquidity.

They're supposed to open a window where financial institutions can pledge collateral and do it that way.

And I'll just point out that when the bond yields were quite high, the Fed did buy quite a bit.

And they would actually have a large profit if they stopped during that period.

Instead, they continued on when we were near the zero bound.