Will the “Whatever-it-Takes” Federal Reserve Have What it Takes?

Ground-scraping interest rates turn savers into speculators and quarantined millennials into day traders. They facilitate overborrowing, suppress market signals, misdirect investment dollars, and promote the dubious business of turning well-financed public companies into heavily indebted private ones.”

–James Grant, “Powell Has Become the Fed’s Dr. Feelgood”; The Wall Street Journal 6/28/2020

Except for Jim Grant’s concerns (above), I’m all for the Federal Reserve’s unprecedented role supporting the stock market and broader economy (no, those aren’t the same things), as they contend with the fallout from the Coronavirus pandemic.

How long can the Fed keep it up?

As Richard Nixon’s chief economist, Herbert Stein, once opined, “whatever can’t continue forever . . . won’t.”



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