Limitless: The Federal Reserve Takes on a New Age of Crisis

Over the past few years, America’s central bank has taken on vast new powers to regulate businesses and the economy, according to this probing study. Smialek, the Federal Reserve correspondent for the New York Times, provides a moment-by-moment account of efforts by Fed chairman Jerome Powell and other officials to avoid economic collapse during the Covid-19 lockdowns instituted in March 2020. Exceeding its usual purview of lending to banks and buying Treasury bonds, the Fed provided loans directly to Main Street businesses and bought vast quantities of corporate bonds and other private debt. Equally important, she notes, was the Fed’s shift from adjusting interest rates to subdue inflation to keeping them as low as possible to maintain full employment—a focus that, critics contend, allowed the current inflation surge to take root in 2021. Smialek dramatically describes the pandemic’s financial chaos—Fed economist Andreas Lehnert “was in his office plugging away, messaging colleagues and liaising with lawyers, when the next morning dawned, strange and terrifying”—and provides lucid sketches of Fed history, analyses of financial markets, and explorations of the impact of Fed policy on everything from wealth inequality to climate change. The result is a timely and insightful primer on one of America’s most powerful and least understood institutions. (Feb.)