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This is the Cato Daily Podcast for Wednesday, December 23rd, 2020.

I'm Caleb Brown. The Federal Reserve originally had a limited role, and through

successive crises including the current COVID-19 crisis, the Fed has moved more directly

into areas where it shouldn't be, according to Cato's Jim Dorn.

As the economy recovers in 2021, what do those interventions mean?

We spoke earlier this month.

Jim, you're a critic of the Federal Reserve, I think that's fair to say.

How did COVID-19 change the Federal Reserve's policies?

Well, primarily the Fed started to get into more credit allocation policies rather than pure monetary policy.

It set up a number of facilities or programs for under its emergency lending authority including a corporate

credit facility both a primary and secondary market facility Main Street lending facilities, a number of other facilities, including

a term asset-backed securities loan facility, and these allowed the Fed for the first time ever to lend to corporations, also municipalities under the special lending program for municipalities and states.

...