The Unstoppable Coronavirus vs. The “All-Powerful” Federal Reserve

The Unstoppable Coronavirus vs. The “All-Powerful” Federal Reserve

Has the Federal Reserve finally met an opponent that it won’t be able to defeat?  Ever since the last financial crisis, unprecedented intervention by the Fed at key moments has kept the economy and the financial system relatively stable.  No matter what has come along, it has seemed like the Federal Reserve has always had an answer, and this has created an environment that has enabled the most ridiculous stock market bubble in U.S. history to grow to epic proportions.  But now COVID-19 is perhaps the greatest challenge that the Fed has faced in modern times.  No matter how low interest rates are pushed, and no matter how much helicopter money the Fed drops from the sky, it isn’t going to cause fearful Americans to go shopping, take trips or start businesses.  And nothing that the Fed can do will be able to mitigate the severe disruptions to global supply chains that we are currently witnessing.

But that doesn’t mean that the Fed isn’t going to go back to the same old playbook that has worked so well in the past.

On Tuesday the Fed announced an emergency rate cut, and instead of soaring, stock prices absolutely tanked.  In fact, the Dow Jones Industrial Average ended the day down 785 points

via theeconomiccollapseblog The Unstoppable Coronavirus vs. The “All-Powerful” Federal Reserve