Federal Reserve Chairman Jerome Powell must thread the needle in the coming days.
On the one hand, the economy seems to be stumbling as the year draws to a close given the alarming spread of the coronavirus across the entire country.
On the other, economic activity is expected to recover sometime next spring or summer as COVID-19 vaccines become widely available.
Should the Fed take any more action to help the economy bridge the pandemic? Or is the best bet waiting for more economic relief from Congress? Washington lawmakers seem tantalizingly close to a deal by the end of the week, yet it could be another false dawn for a fifth round of COVID-19 fiscal relief.
Despite the twists and turns of the soap opera centered on COVID spending, financial market conditions have remained healthy all summer and fall, helped in large measure by the Fed’s purchases of $80 billion