Part 11/13:
Interest rates: Initially, borrowing costs for the government could decline, but private lenders, fearing inflation and systemic risk, may demand higher returns, leading to higher interest rates for consumers and businesses.
Inflation: Increased government spending and debt issuance, coupled with asset risks in the financial sector, could accelerate inflation, affecting everyday prices.
Financial Stability: The potential relaxation of regulations could undermine the resilience of the banking system, making future crises more severe and systemic, especially if banks become overleveraged.