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Fed Chair to Congress: Do Whatever It Takes to Keep the Economy From Collapse

It’s a reversal of the usual relationship between elected officials and independent central bankers.

There were many thousands of viewers watching Federal Reserve Chair Jerome Powell’s news conference on Wednesday afternoon, between various online feeds and financial news networks. But his most important message was directed at just 536 people.

That would be the 435 members of the House of Representatives, the 100 members of the United States Senate, and the president of the United States.

The Fed has taken expansive efforts to prop up lending markets in the United States, pledging to inject trillions of dollars of support into the markets, including for corporate bonds (big companies), bank lending (midsize companies), mortgage-backed securities (home buyers) and municipal bonds (states and localities). Congress has encouraged this, authorizing billions to the Treasury to be combined with Fed resources. Continue reading.

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