, Columnist
Here’s What Could Go Wrong With Yield-Curve Control
There’s a reason the Fed’s so reluctant to jump into it.
Fed Chairman Jerome Powell is understandably cautious.
Photographer: Bloomberg/BloombergThis article is for subscribers only.
To fight the economic downturn caused by the coronavirus pandemic, some have suggested the Federal Reserve turn to a tool it hasn’t used since World War II: yield curve control.
The Fed — which holds its annual monetary policy symposium from a virtual Jackson Hole this week — has resisted the idea so far. But financial markets seem to expect it to relent at some point. It’s worth thinking of the long-term economic risks.