It seems reasonable to expect hyper-inflation when we print trillions of new dollars. But the market doesn’t seem think inflation will happen. The most recent auction for 10 year Treasury bills sold them for 3 5/8% annual interest rate. Twenty year T-bills went for just 4 1/2%. This is higher than the last 10 years, but nowhere near the last time we mixed out of control spending plus large debts (late 70s).
What does the market see to keep this hyper-printing from yielding hyper-inflation?
I really don’t know for sure. Consider this a question more than an analysis.
Inflation can be driven by both money supply and product demand. So if inflation is to be low, and money supply high, then the market must expect demand to be way off.
Put another way, they see us going into a Japan like period of stagnation. And given the rate on the twenty year bill, they don’t think it will end quickly.