The unusual actions the U.S. Federal Reserve Board has taken to shore up financial stability likely won’t spark inflation, according to a special report from TD Economics.

“Since the onset of the global credit crunch in August 2007, the U.S. Federal Reserve has resorted to a slew of innovative (and sometimes unconventional) approaches to dealing with the ongoing disruptions in the U.S. financial sector,” TD notes.

Examining these various actions, it concludes, “that the impact of these liquidity injection measures on the monetary base will likely be somewhat muted.” It also argues that if the Fed’s balance sheet becomes undesirably thin as a result of its efforts, “there may be ways in which it can be bolstered without the Fed resorting to unnecessary money creation.”

It adds that, “We also show that while we believe that the discussion of moral hazard has some validity, it becomes obvious that the issue of moral hazard must come second to the desire for financial stability.”

“In conclusion, it is fair to say that the new measures introduced by the Fed are unlikely to contribute significantly to U.S. inflation. This is because the offsetting liquidity draining exercises undertaken by the Fed have meant that their impact on the monetary base will be limited,” it concludes. “Moreover, we note that despite the depletion of the Fed’s U.S. Treasury holding, there are options available for it to beef up its balance sheet without resorting to the printing of money. Indeed, we believe that the Fed has sufficient capacity to do more to stabilize the U.S. financial sector in the future if the need does arise.”