Webcast: The Fed’s Role in Keeping the Economy Afloat, Aiding in Recovery

Article by Constellation

In our inaugural episode of Fortunato & Friends, Exelon Chief Economist Ed Fortunato interviews Dr. John Burger, Loyola University economics professor, on the role of the Federal Reserve in influencing equity and lending markets during COVID-19. Keith Poli, a member of Constellation’s Commodities Management Group, moderated the conversation and also shared some insights.

The three speakers deliberated on the following questions:

1. The old saying of “Don’t fight the Fed” seems more applicable than ever. The Federal Reserve has provided $2 trillion in loans to companies at very low interest rate, which makes up for a lot of lost corporate earnings. How does the Federal Reserve look at that, and how long can the Federal Reserve sustain that level of support?
2. How close were we to a financial meltdown before the Federal Reserve stepped in?
3. The role of the Federal Reserve changed with COVID-19 in a way that interacts with markets. What taboos or long-standing customs did the Federal Reserve need to reassess during the pandemic?  Will the Federal Reserve ever return to previous policies?
4. The U.S. was the largest oil and gas producer in the world in Q1 (12.5 mm bbl/day & 94 Bcf of gas). This has an impact on the U.S. dollar, and the Federal Reserve sets the tone for other central banks globally.  How will the Federal Reserve need to manage the dollar going forward and what are the implications for the U.S. economy?  Plus, how does the Federal Reserve take this back as the economy gets back on its feet?
5. Inflation: People ask us if there is a risk to inflation in this environment. This is the first recession since World War II where higher oil prices didn’t put us into a recession. This is a different crisis vs. the 1970/1980s oil shock that was supply-driven. How is the Federal Reserve looking at inflation or deflation differently?

Listen to the full webcast below to hear expert insights.

Every month, Fortunato & Friends, a live webcast interview, will feature a special guest each month on a topic related to driving factors impacting the energy market. Register for our August 4^th Fortunato & Friends webcast featuring special guest Lisa Graham, vice president and treasurer for Exelon, on COVID-19 and the economic impact on Exelon and other energy companies.

Register today