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According to National Bank of Canada analyst, Krishen Rangasamy, the liquidity injections from the Federal Reserve during the coronavirus crisis will not push inflation above the 2% target. 

Key Quotes:

“Unprecedented liquidity injections by the Fed have caused money supply to soar at a record pace, with the M2 measure on track to grow nearly 20% year-on-year in the current quarter. Which begs the question ─ could the Fed’s ultra-loose policy stance cause the annual inflation rate to surge above its 2% target? That’s unlikely in our view, at least over the near to medium term.”

“The negative output gap stemming from the coronavirus recession is weighing on prices as evidenced by latest data showing the largest decline ever recorded for core inflation. Moreover, risks of an inflation surge are low as long as the velocity of circulation of money, i.e. frequency of monetary transactions in the economy, remains low.”
 

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