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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
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Powell Says Fed to Act ‘Forcefully’ to Support U.S. Recovery

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?