But supply chain issues have resolved yet inflation is still high?
If you want to understand why the massive expansion of the monetary supply didn't initially stoke inflation, Professor Selgin does a nice job of explaining it.
Basically, the Fed printed new money, but at the same time offered a very high interest rate on Excess Reserves held at the Fed (first time ever in 2008). So banks took the new money, and deposited it back at the Fed because they got a higher interest rate than anywhere else. So at least for the for a while, a lot of the new money never entered the broader economy. Check the Fed's charts on excess reserves. $3.2T dollars was just sitting at the Fed collecting interest.
This was entirely intentional by the Fed. Bernake said "our liquidity provision had begun to run ahead of our ability to absorb excess reserves held by the banking system, leading the effective funds rate, on many days, to fall below the target set by the Federal Open Market Committee. … Paying interest on reserves should allow us to better control the federal funds rate, as banks are unlikely to lend overnight balances at a rate lower than they can receive from the Fed"
The Fed was initially try to "sterilize" the new money by selling Treasuries at the same time (print $1T in money to buy failed assets, sell $1T in Treasuries = net $0 new money). But they ran out of Treasuries, so resorted to printing new money, but incentivizing banks not to use it because otherwise the they'd drive the interest rate way below target.
If you want to understand why the massive expansion of the monetary supply didn't initially stoke inflation, Professor Selgin does a nice job of explaining it.
https://www.cato.org/blog/rudderless-fed
Basically, the Fed printed new money, but at the same time offered a very high interest rate on Excess Reserves held at the Fed (first time ever in 2008). So banks took the new money, and deposited it back at the Fed because they got a higher interest rate than anywhere else. So at least for the for a while, a lot of the new money never entered the broader economy. Check the Fed's charts on excess reserves. $3.2T dollars was just sitting at the Fed collecting interest.
https://fred.stlouisfed.org/series/EXCSRESNS
This was entirely intentional by the Fed. Bernake said "our liquidity provision had begun to run ahead of our ability to absorb excess reserves held by the banking system, leading the effective funds rate, on many days, to fall below the target set by the Federal Open Market Committee. … Paying interest on reserves should allow us to better control the federal funds rate, as banks are unlikely to lend overnight balances at a rate lower than they can receive from the Fed"
The Fed was initially try to "sterilize" the new money by selling Treasuries at the same time (print $1T in money to buy failed assets, sell $1T in Treasuries = net $0 new money). But they ran out of Treasuries, so resorted to printing new money, but incentivizing banks not to use it because otherwise the they'd drive the interest rate way below target.