The Julia La Roche Show · Thursday, October 1, 2026
Dr. Mark Thornton explains that as government borrowing increases interest rates, the Federal Reserve may be compelled to engage in quantitative easing by purchasing government debt. This action requires the Fed to create new money, which he argues fuels inflation. He believes the Fed is constrained and may need to print money to prevent interest rates from harming the economy, despite the inflationary consequences.
“If the government is borrowing more and more money and putting upward pressure on interest rates, then the Fed, Federal Reserve, has to come in and buy up. They have to mop up some of the government debt in order to keep a lid on interest rates.”
“And so that's what is generally called or related to quantitative easing, where the Fed is buying up government debt. And but in order to buy up the government debt, they have to create more money out of thin air. And so they add to the inflationary fire in the economy that ultimately is going to create higher prices.”
“And the Federal Reserve is likewise very, very constrained. It can really do little else. But to set that federal funds rate and then print money.”