Fed is ‘throwing money in the wrong place,’ says Sheila Bair, former top banking regulator

[Hoodat]

Fed is ‘throwing money in the wrong place,’ says Sheila Bair, former top banking regulator

Joy Wiltermuth     |     March 16, 2020 at 11:04 a.m. ET

Sheila Bair, a top U.S. banking regulator during the 2007-’08 global financial crisis, said the Federal Reserve needs to quickly shift its focus to getting credit flowing to U.S. businesses crippled by the spreading coronavirus and workers losing their jobs.

“They are throwing money in the wrong place,” Bair said of an unprecedented move by the Fed on Sunday to slash benchmark rates to zero and start a $700 billion Treasury- and mortgage-bond buying program.

“This isn’t a financial crisis — at least not yet,” she told MarketWatch on Sunday evening following the Fed’s announcement, which drops the target U.S. benchmark rate to zero and aims to shore up liquidity for banks and investors in the $15.6 trillion Treasury and $8.5 trillion agency mortgage bonds markets.

“Lowering interest rates to zero doesn’t help if businesses can’t pay their loans back and they don’t have cash flow,” she said. “We need to get help out there, especially to small businesses and people already losing their jobs.”

https://www.marketwatch.com/story/exclusive-fed-is-throwing-money-in-the-wrong-place-says-sheila-bair-former-top-banking-regulator-2020-03-15


Blair sees the Fed repeating the same mistakes they made in 2008-2009.  Sure, it helps Goldman Sachs bottom line.  But for regular folks?  Not so much.