Paraphrasing article: US monetary policy has failed consistently because it is predicated on a rise in inflation caused by decreases in the unemployment rate, but this hasn't occurred - probably because the unemployment rate (or how its measured) doesn't correctly capture the change in spending power in the labour market. /Paraphrasing

It's kinda the same in my country - for the statistical purposes of the official Statistics Department unemployment rate, you are no longer unemployed if you a) work 1 hour a week or b) have actively stopped seeking employment.

I guess it's designed that way according to international best practice or something, but it means we have rather odd situations where the unemployment rate decreases, but the amount of people seeking income support increases.

Essentially, the Fed seems to be putting more effort into appearing like they are doing something to help the economy in the hopes it assuaged people's fears and gets them to transact than actually doing anything to help.

Powell has essentially responded to things by equivocating and shifting some language around so that facilitating increased employment is now a higher priority to the feds than a stabilized interest rate.

Much of the economy, banking, and finance is fundamentally about trust. Without that, people don't spend, or take risks. Money doesn't flow, and businesses can't thrive. Lack of a thriving business environment chokes the ability of the entire economic/financial system.

Keynesian economic theory calls for governments to start spending in a big way. This "rallies" people and generally inspires confidence which drives demand. The main point is to get people paid for doing something not even necessarily useful,and get them to stop worrying about whether the Sun will rise tomorrow.

The article author finds hope in the Fed's equivocation that they at least appear to be coming to terms with the fact this is the right thing to do.

What I'm not clear on is how in the hell the Fed can justify "Haha, money printer goes brrr..." Without a matching Act of Congress, but it's hard to take anything seriously when you start getting into the more arcane aspects of how monetary policy works, because monetary policy is nigh indistinguishable nowadays from "Quick! Look busy so that everyone thinks everything will be okay!"

That's the gist of the article as I get it at least.

My understanding is the balance sheet is unimportant as long as the economy continues to grow; debt is outpaced by the growth. To that end, what's most important is that people are comfortable, capable, and willing to participate in keeping the economy growing. Something not happening because there's a physical risk to recklessly engaging in massive unconstrained economic activity, and no one knows how long until people stop ranking fear of Coronavirus a more pressing concern than the crashing of the economic machine.

Personally, I think this is a reckoning a long time coming, and something the Fed can't use it's traditional tools to fix since the last 40 or so years fundamentally shifted the economic capabilities away from decentralized industry due to a regulatory environment that highly favored consolidation and centralization. That isn't something you necessarily bounce back from quickly, which is actually an opportunity in it's own way. The bigger, more omnipresent and impossible seeming a problem the government can get everyone on board (and paid) to solve the better. If only enough unity materialized to do it.