Federal Reserve’s Jerome Powell: ‘There is no limit of what we can do’

If you ever bet against the Federal Reserve, you might as well flush your money down the drain. It is like a casino: The house always wins.

This is evident in the financial markets. Everything should be theoretically be in the red, but the central bank swooped in, pumped trillions into the economy, and rescued everyone from the flaming building. And you can expect more to come.

Speaking in a Brookings Institution video event, Fed Chair Jerome Powell made a revealing statement: “There is no limit of what we can do as long as it meets the test of law as amended by Dodd-Frank.”

Yikes.

But he looks to be correct. The Fed has slashed interest rates to zero percent, unleashed quantitative easing infinity, and purchased all different types of bonds (Treasurys, corporate, and muni). Right before the video event, the Eccles Building announced a $2.3 trillion program to help small businesses.

What else will the Fed do? Apparently, a whole lot more because Powell keeps repeating that the central banks is prepared to take more action.

“We will be in no rush to pull back on asset purchases or our lending program until we can make sure the economy is on solid footing,” he said, adding that the Fed’s role is “to provide some stability and relief, keep rates low, keep financial markets functioning and then support robust recovery when it does come.”

Get ready for the COVID-19 inflation tsunami.