Federal Reserve Launches Unlimited Quantitative Easing to Combat Pandemic Shock

In March 2020, facing the risk of panic and liquidity drying up in financial markets due to the COVID-19 pandemic, Federal Reserve Chairman Jerome Powell announced an unprecedented measure: the initiation of "unlimited" Quantitative Easing (QE). The Fed committed to purchasing U.S. Treasury securities and mortgage-backed securities (MBS) without an upper limit, aiming to ensure the smooth functioning of the financial system and suppress long-term borrowing costs.

This aggressive monetary policy was essentially intended to prevent a collapse of credit markets and inject unlimited liquidity into the financial system. Although the action stabilized markets in the short term, for conservatives and free-market advocates, the Fed's role became overextended, potentially distorting capital allocation and setting the stage for future asset bubbles and currency devaluation by suppressing interest rates and artificially supporting asset prices.