Fed Chairman Powell Belongs 'On a Pedestal'

"I always had Paul Volcker on a pedestal in terms of Fed chairmen," Buffett said. "[Current Fed Chairman] Jay Powell, in my view, belongs with him on that pedestal," he added. "They [the Fed] acted with unprecedented speed and determination" to prop up the economy in the wake of COVID-19 crisis. Regarding the massive expansion of the Fed's balance sheet, he said, "We don't know the consequences of doing that, but we do know the consequences of doing nothing, and we owe the Fed a great thank you."

Among the various initiatives launched by the Fed to prop up the U.S. economy in the midst of the crisis are:

• Primary Market Corporate Credit Facility (PMCCF)
• Secondary Market Corporate Credit Facility (SMCCF)
• Commercial Paper Funding Facility (CPFF)
• Money Market Mutual Fund Liquidity Facility
• Paycheck Protection Program Liquidity Facility (PPPLF)
• Main Street Lending Program
• Municipal Liquidity Facility (MLF)

 

Later, in response to a shareholder question about whether Berkshire is considering lending out its large and growing cash hoard, Buffett said: "This is a great time to borrow money. It may not be a good time to lend money." Noting that corporate debt issuance has proceeded at a record pace as the Fed has provided liquidity, he asserted, "We are not in the business of subsidizing companies with [our] shareholder money."


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