[arcticbull]

Broadly speaking the tools of monetary policy available to reduce inflation are:

(1) Increasing reserve rates for lending. This causes the circulating supply of currency to go down.

(2) Increasing interest rates for lending. This reduces the demand for borrowing, which is largely fractional reserve. This also causes the circulating supply of currency to go down.

(3) The Fed unwinding its balance sheet by selling bonds. They collect the cash and remove it from circulation. They can increase the circulating supply by buying bonds.

Taxation doesn't change inflation, to the best of my knowledge, as before and after taxation the same amount of money exists in the circulating supply. Taxation is fiscal policy.

The government doesn't print money per se, the government can borrow money by selling bonds. This just reallocates the existing money supply. The overwhelming majority of US government debt is held domestically by US persons. This doesn't change the money supply either, unless the Fed steps in.

[reducesuffering]

> "Taxation doesn't change inflation, to the best of my knowledge, as before and after taxation the same amount of money exists in the circulating supply. Taxation is fiscal policy."

Fiscal policy affects inflation. You're thinking of inflation as "the money supply / total of all $", but that's only one definition or part of inflation. Generally, you would also describe inflation as the price of things you buy going up or down (CPI). Say you ratchet up the effective tax rate to 90%. Everyone's going to have a whole lot less money to buy extra things. Some things with fixed raw input cost still wouldn't budge much. However now that people's monthly incomes have gone from $5000 -> $1000, you're going to see houses, education, Pelotons, and other extra income sinks, have their prices fall precipitously.