Economics
Powell Pushed to Edge of Fed’s Boundaries in Fight for Economy
- Congressional Democrats want Fed to buy low-rated muni debt
- Changes could lead to ‘complete re-examination’ of Fed role
This article is for subscribers only.
By pushing the Federal Reserve into corners of financial markets it has mostly shunned in its 106-year history, Chairman Jerome Powell is running into some thorny questions.
Like, for instance, how to maintain independence from the U.S. Treasury when the economic-support package Congress passed says they should work together? Or whether the same guidelines for companies receiving federal aid, which range from compensation limits to off-shoring restrictions, apply to the Fed if it gets more money from Treasury? And how about which companies -- and perhaps eventually, municipalities and states -- are invited to borrow and at what cost?