Odd Lots

How the Federal Reserve Grew More Powerful Than Anyone Ever Imagined

Mar 13, 2023

Jeanna Smialek, a Fed reporter for the New York Times and author of "Limitless: The Federal Reserve Takes on a New Age of Crisis," discusses the evolution of the Federal Reserve's powers. She highlights how the Fed has expanded its role beyond just setting interest rates, becoming a key player in stabilizing the economy through crises. Smialek dives into its emergency lending capabilities and the challenges it faces amid political scrutiny, all while maintaining its independence in a polarized environment.

44:42

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Episode guests

Jeanna Smialek

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Episode notes

Intro

2min

The Evolving Role of the Federal Reserve

7min

The Shifting Role of the Federal Reserve

6min

The Fed's Emergency Lending Powers

14min

The Fed's Evolving Role in Crises

7min

The Federal Reserve: Independence vs. Political Pressure

10min

Conclusion and Promotions of Financial Insights

2min

In the short term, the Federal Reserve's job is straightforward. Raise or lower interest rates in order to meet its employment and inflation targets. But over the years, it has evolved to do a lot more than just set the price of short-term bank borrowing. With each successive crisis, the Fed has taken on new powers and responsibilities to stabilize finance, markets and the broader economy. And with Washington characterized by partisan gridlock, the Fed is seen as the one entity that can actually move with some agility when it's needed. On this episode, we speak with Jeanna Smialek, a Fed reporter at the New York Times, and the author of the new book Limitless: The Federal Reserve Takes on a New Age of Crisis, about the history of the Fed and how it became so powerful.

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