Trillion Dollar Triage: How Jay Powell and the Fed Battled a President and a Pandemic—and Prevented Economic Disaster

Federal Reserve chairman Jerome “Jay” Powell struggled to rescue the economy while fending off Donald Trump’s harassment, according to this intricate study of the Covid-19 economic meltdown. Wall Street Journal correspondent Timiraos recounts Powell’s tumultuous tenure from his appointment in February 2018 up to June 2021, focusing on how Trump tried to bully him into lowering interest rates. (Sample Trump tweet: “Who is our bigger enemy, Jay Powell or Chairman Xi?”) When lockdowns tanked the economy in March 2020, the Fed turned to “shock-and-awe” measures, cutting interest rates nearly to zero while buying colossal quantities of bonds and lending oceans of money to banks and businesses; his efforts stabilized the financial sector—and, according to some critics, led to rising inflation in 2021. Timiraos weaves a lucid behind-the-scenes narrative of the early Covid panic, when Powell and the Fed staff struggled hour by hour to get money out to a collapsing economy and worked with Treasury Secretary Steve Mnuchin and a fractious Congress to cobble together emergency fiscal measures, while cogently exploring the economic trade-offs among unemployment, inflation, stability, and moral hazard. This is a riveting story of policy making in crisis and an illuminating examination of how drastically the Fed’s role in the economy has changed. Agent: Rafe Sagalyn, ICM Partners. (Mar.)