by Thomas L. Hogan
The American Institute for Economic Research
The Federal Reserve responded rapidly to the coronavirus crisis. In addition to its traditional monetary policy, the Fed opened an array of emergency lending facilities. Of course, these measures were intended to be temporary. “When this crisis is behind us,” Fed Chair Jerome Powell said in May, “we will put these emergency tools away.” He made similar statements a week later and again in June.
Now three months after making that promise, the Fed’s lending facilities are still ongoing. In fact, some are just getting started.
The crisis period is now behind us. The need for these facilities, if ever there was one, is now past. It’s time to put away the emergency lending tools.
The Fed’s initial actions were swift and decisive. From March 4th to 15th, the Federal Open Market Committee cut its target for the federal funds rate to the range of zero to 1/4 percent.