Why monetary policy does not result in inflation in the U.S. market?
Or we may say the impact on inflation is not as theory tells.
The reason is easy, considering the supply and demand of USD. As USD are internationally accepted and even treated as the credit currency and security, the demand for USD is unexpectedly large, especially in a crisis. Therefore, the extra supply of USD by FRED is absorbed by other countries’ demand. Without too much supply of money, the price level would not increase and inflation does not exist.
Things become different while including other factors in the model such as the commodity.