Essential reading from @BChappatta on the Fed's clever lawyering around CARES Act requirements for companies that received government rescue funding.

I think this gets at the heart of a debate on here among Fed policy observers. https://www.bloomberg.com/opinion/articles/2020-06-18/fed-seems-to-skirt-the-law-to-buy-corporate-bonds?sref=hXddX0ju

On the one hand, some folks praise the Fed's sweeping actions to boost markets. After all, would letting markets fail help workers? The Fed is doing what they can to unleash the $$ spigot, & they're appealing to Congress to do more fiscal policy to handle distributional concerns.

OTOH, some folks (include myself here) bemoan flooding markets with $$ w/out attaching conditions. My fear is that, while maybe not well understood by the public, actions like this have really destabilizing public opinion/democracy blowbacks when the 2 tiered recovery is felt.

This debate will continue for a while, w/good faith ppl on both sides. But I think the actions around bond markets show: the Fed has some very clever lawyers. When they want to unleash $$, they can. And to be clear: Fed officials are *policymakers,* not just technocrats.

Remember this when they say their hands are tied in other domains (see my tweets yesterday about the Fed not extending the muni lending facility to U.S. territories). This is the frustration: the Fed feigns helplessness to fiscal policymakers only when it comes to Main Street.

Final observation: folks that have worked in Congress seem to intrinsically get this. On Dodd-Frank, there were many instances of the Fed inventing exemptions Congress either didn't want or forgot to include while telling us the law didn't allow them to do XYZ for consumers.