[marcosdumay]

> The only thing preventing that from translating into the broader price level is that money velocity collapsed due to the Covid shutdowns.

Hum... Money management 101 says that if velocity goes down, you must print more money to compensate. Otherwise you get a deflationary crisis added into your real world one. (And fiscal policy should intervene increasing the velocity, but fiscal policy is a fraud everywhere, so nothing new here.)

The real test on the seriousness of the US monetary policy is whether they will drain the market once the velocity increases. I do expect them to, but well, anything may happen.

Anyway, that part of the comment on the title is a case of "well, duh?!?" What else could we expect any central bank to do right now? But the data is still interesting.

[atq2119]

MV=PQ is popular in some circles, but it doesn't describe casual links.

You can't reason about how those quantities behave from the equation, which is a mere accounting tautology.

Both recently and in QE post-global financial crisis, V went down because M increased without any reason for why the right-hand side of the equation should change.

[marcosdumay]

> V went down because M increased without any reason

Wait, if we are talking about 2017-2019, that's a different story. But right now, V got to the floor (everywhere, not just the US) because of the pandemic.