As President Trump flounces helplessly amid the still-growing-thanks-to-him coronavirus pandemic, embarrassing himself and the country he nominally leads on television, American prestige and influence in the world continue to wane, perhaps terminally. Except, that is, in one area. And for that, Americans and the world have one man to thank, the kind of man the man who hired him doesn’t believe has the energy or virility to truly exercise power, and that man is, improbably enough, Jay Powell.
By April, the Fed had lent another nearly half a trillion dollars to counterparts overseas, representing most of the emergency lending it had extended to fight the coronavirus at the time.
The massive commitment was among the Fed’s most significant—and least noticed—expansions of power yet. It eased a global dollar shortage, helped halt a deep market selloff and continues to support global markets today. It established the Fed as global guarantor of dollar funding, cementing the U.S. currency’s role as the global financial system’s underpinning….
“The Fed has vigorously embraced its role as a global lender of last resort in this episode,” said Nathan Sheets, a former Fed economist who was the Treasury Department’s top international deputy from 2014 to 2017 and now is chief economist at investment-advisory firm PGIM Fixed Income. “When the chips were down, U.S. authorities acted.”
One of them, anyway.