EP 341 The Federal Reserve’s Impact on You and Its Extraordinary Response to the Pandemic

It is really hard for most of us to understand what the Federal Reserve actually does and means to the our pocketbooks. After all it was the former Fed Chairman, Alan Greenspan, who famously quipped ‘never explain, never excuse’. The invisible hand of the Fed became more apparent during the financial meltdown in 2008 as Ben Bernancke became a key player in fashioning a way out of the crisis. Extraordinary measures were taken to provide liquidity to the financial system here and abroad. The monetary stimulus resulted in cheap money upon which much of the economic success of the last decade has been built. As Danielle DiMartino Booth, our guest and a former advisor to the head of the Federal Reserve Bank of Dallas explains in her book, ‘Fed Up’, in the 5000 years of record keeping, debt has never been cheaper than it is today. So we set out in this interview to understand what that means to you and your financial future. We start with the basics so we all have some basic knowledge of the Fed, tie it to fiscal policy, which is governed by Congress and then explains its impacts on Main Street. And while Ron Paul and others have repeatedly raised the notion of ‘end the Fed’, Danielle lays out reforms that she’d like to see to the system to make it work better on behalf of the public. This podcast episode includes additional material describing the unprecedented measures taken by the Federal Reserve in response to the ongoing coronavirus crisis.