>>21883823I have a stupid macro question
Lets say a central bank stops buying its own treasury bonds. Is this deflationary or inflationary?
>inflationary caseBiggest bond purchaser stepping back means less demand, bond prices go down, so interest rates go up. High interest rates = inflation. See 2021. But this is reasoning from price change.
>deflationary caseIf the bank isn't buying bonds, it's not injecting money into the economy. This is obviously deflationary.
Which is it??
