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The Sovereign Fed

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The Sovereign Fed

Dissent Magazine,

5 min read
3 take-aways
Audio & text

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The Federal Reserve’s response to COVID-19 unleashed a never-before-seen monetary arsenal.

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In response to the COVID-19 pandemic, the US Federal Reserve guaranteed and injected multitrillions of dollars into domestic as well as global markets. Professor Trevor Jackson explores the Fed’s unparalleled actions in the context of their potential impacts and costs, as well as their capacity to assist ordinary Americans. While not everyone will agree with Jackson’s prescriptions, his contention that the Fed holds increasing sway over the global financial system provides important food for thought.


The US Federal Reserve acted broadly to forestall a COVID-19 economic calamity.

Beginning in March 2020, the Fed deployed a suite of monetary tools to help arrest an economic and market panic caused by COVID-19. Its actions included cutting the Federal Funds rate to zero, injecting multitrillions of dollars of liquidity into capital markets and ensuring a liquidity channel of currency swaps with other central banks. Amid massive equity, credit and commodity price volatility, the Fed provided the necessary financial resources to an economy wracked by tens of millions of unemployed US workers.

US lawmakers...

About the Author

Trevor Jackson is an assistant professor of economic history at George Washington University.

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