Federal Reserve’s efforts on coronavirus raise eyebrows
By Sylvan Lane
The Federal Reserve is pumping unrivaled levels of economic aid across the U.S., blowing through old taboos with trillions in rescue loans and bond purchases to buoy the American economy through the coronavirus pandemic. Faced with a once-in-a-century economic crisis, the Fed under Chairman Jerome Powell has pledged to flood the U.S. with as much rescue lending and bond purchases as its legal charter allows and the economy requires. … “If the Fed continues to go down this road and opens new windows and picks more sectors to support, particularly in this top-down way, the political consequences of this for independent central banking are going to be pretty interesting,” said Karen Shaw Petrou, managing partner at Washington, D.C., research and consulting firm Federal Financial Analytics….Petrou also noted that the Fed’s cutoff for the Main Street lending program was well above the size and revenue of most small businesses facing uncertain financial danger….“The only Main Street I know that looks like that is Park Avenue,” Petrou said. …“When you’re putting a $2.3 trillion program together and trying to open a lot of these complex windows essentially overnight, things will go wrong,” she said.