How the Federal Reserve Grew More Powerful Than Anyone Ever Imagined

Odd Lots

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🗓️ 13 March 2023

⏱️ 50 minutes

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Summary

In the short term, the Federal Reserve's job is straightforward. Raise or lower interest rates in order to meet its employment and inflation targets. But over the years, it has evolved to do a lot more than just set the price of short-term bank borrowing. With each successive crisis, the Fed has taken on new powers and responsibilities to stabilize finance, markets and the broader economy. And with Washington characterized by partisan gridlock, the Fed is seen as the one entity that can actually move with some agility when it's needed. On this episode, we speak with Jeanna Smialek, a Fed reporter at the New York Times, and the author of the new book Limitless: The Federal Reserve Takes on a New Age of Crisis, about the history of the Fed and how it became so powerful.

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0:36.9	podcast. Hi, I'm Eric Schatzger, the editorial director of Bloomberg New Economy. At Bloomberg,
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1:08.4	Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.
1:24.1	And I'm Tracy Alloway. Tracy, do you remember like after the great financial crisis and the fed
1:29.3	couldn't get the unemployment rate down even with all the rate cuts and people were talking about
1:34.4	of monetary policy is pushing on a string in this environment. You remember hearing that
1:38.0	term a lot? You know what I remember? I remember people complaining about below-target inflation
1:43.7	for many, many years and how the fed, we couldn't figure out why the fed wasn't able to push up
1:49.5	prices and now fast forward to 2023. We can't figure out why the fed can't bring inflation under
1:56.1	control. I don't want to insult like the various like brilliant economists and pundits out there
2:02.4	I never would. But I always found the complaints about like too low inflation to just be like
	...

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