US money

The Fed has a dual mandate of stable prices and maximum employment. Doesn't seem to involve providing liquidity to the US government.

The problem seems to be once the yield curve flattens a bit, we're looking at ~6-8% yield for long term US treasuries.

It doesn't seem feasible for the US to pay back the Federal debt at this rate.

So something has to give:

1. Fed yields to political pressure and give up the 2% inflation target, as priced in by the market, or

2. Fed keeps the tightening program and risk of US government default pushes up the yields, or

3. inflation target 2% reached without further tightening in 2024.

I don't believe #3 will happen, the Fed Balance sheet still has ~7-8T outstanding.  A lot of the numbers of the US economy doesn't add up, the only question is what will break first.

At either rate the current long term treasury yields are at least priced 3% lower than what should be expected. Either because #1 long term inflation is going to be higher, or #2 treasuries will be considered more risky down the road.