Goldman Sachs: Morgan Stanley's inflation report is greatly exaggerated

The inflation hawks never seem to give up. This time, though, a really big dove has overwhelmed a younger hawk.

Goldman Sachs (GS) is now arguing that as far as inflation goes, the U.S. Federal Reserve can take it easy, because there's no problem ahead. Morgan Stanley (MS), on the other hand, sees an inflation risk if the Fed sticks to its quantitative easing policy for too long.

Dueling scenarios

Through fiscal and monetary policy, the United States has added a record $12.8 trillion in stimulus to the economy and financial system, much of it quantitative easing by the Fed. That level of capital injection has spooked Joachim Fels, co-chief global economist for Morgan Stanley.