No, the Fed Did Not Just Give Stock Traders $1.5 Trillion

I don’t know that much about the world of finance. This was a helpful explanation of what it means to say the Fed “injected” 1.5 trillion dollars. According to Slate, that money was in the form of short-term loans, not a gift.

Federal Reserve Chairman Jerome Powell, currently busy trying to keep the financial system afloat. Eric Baradat/Getty Images

“Again, this is all short-term lending against the safest collateral in the world, U.S. government securities. Nobody is just being given money for keeps. This is why the rhetoric we’re seeing—about how if the Fed can lend to the banks then surely Congress can pay for free college or forgive student loan debt—doesn’t much sense. Stirring up populist outrage at the Fed for doing its part to keep the financial system running is just misguided. We should want our central bank to keep the financial system afloat. If you want to yell about health care or college, keep focused on Congress.” — Jordan Weissmann, Slate.