The Federal Reserve is out of control

It’s true that before 2008 people had critiques of the Federal Reserve. However, in 2008, the Fed upped the ante with bailouts. The most obvious instance of this was the Fed buying longer-term Treasury bonds and mortgage-backed securities.

This is a problem because the Fed owning longer-term securities is the Fed intervening beyond the “crisis”.

As you can see from the above chart, the Fed was buying a lot of assets in 2013 and 2014. Why?! That was way after the crisis in 2008! It’s not the job of the Fed to fix the economy. They are supposed to be the lender of last resort, not the lender of first resort.

The same thing happened in 2020. The Fed kept buying long-term Treasury bonds and mortgage-backed securities well after the crisis. They are still buying them right now! This is perplexing, to say the least. The U.S. Government needs to reduce the Federal Budget in “good times”. And concerning mortgage-backed securities, it looks like the Fed blew up another housing bubble. I’m not even really sure why they started buying them again in 2020 because 2020 was not 2008. 2008 came after a housing bubble, which was not the case with 2020. It’s not the job of the Fed to pick winners and losers in the form of favoring people who already own houses.