The bottom line is that with growing fiscal deficits to historical levels, the long term effect has to be inflationary. In the short run, though, because of the decline in aggregate demand caused by high unemployment and lower levels of investment, policy has to first address deflationary pressures, which is why the Fed is maintaining low interest rates for now.
Stagflation is actually a combination of those two forces with low levels of investment and high inflation, which could be the eventual macro economic outcome from all of this.
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