When the coronavirus brought the global economy to a halt in March, it hit the U.S. Federal Reserve by spin the wheels of finance for businesses across America.

And when funds stopped flowing to many banks and businesses outside of U.S. borders – from Japanese lenders betting on U.S. corporate debt to Singaporean traders needing U.S. dollars to pay for their imports – the U.S. central bank intervened again.

The Fed has long resisted becoming the world’s relief lender. But he threw in reserves after the pandemic has gone global. During a critical two weeks in mid-March, he bought a record $ 450 billion in treasury bills from investors desperate to raise dollars. As of April, the Fed loaned nearly an additional half a trillion dollars to its counterparts overseas, which is most of the emergency loans it made to fight the coronavirus at the time.

The massive engagement was among the Fed’s biggest and least noticed power expansions to date. He eased a global dollar shortage, helped stop a massive market sale and continues to support global markets today. He established the Fed as the global guarantor of dollar funding, solidifying the role of the US currency as the foundation of the global financial system.

Just as the Fed has expanded its role in the US economy to an unprecedented degree during the financial maelstrom of 2008, it has, in the coronavirus crisis, extended its power and influence globally.

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