Leave your feedback Share Copy URL https://www.pbs.org/newshour/show/fed-vows-to-use-all-available-tools-to-prop-up-economy Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Transcript The Fed has been extraordinarily active in recent months, and there are some calls now to expand its future role as a financial regulator. Analysts examine the Fed's evolving role. Read the Full Transcript Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors. JIM LEHRER: Now, the crisis-driven changes in what the Federal Reserve does and how it does it. Jeffrey Brown has our story. JEFFREY BROWN: When interest rates are about as low as they can go, what more can the Federal Reserve do?Today, the Fed assured a nervous world that it will use, quote, "all available tools" to prop up the economy. Indeed, the Fed has been extraordinarily active in recent months, and there are some calls now to expand its future role as regulator and overseer of financial institutions.We look at all this now with Steven Davidoff, professor of law at the University of Connecticut School of Law; John Cassidy, who writes about the Fed for the New Yorker and Portfolio magazines; and Philip Jefferson, professor of economics at Swarthmore College and former research economist at the Federal Reserve.Well, Philip Jefferson, start us off with today. What does that phrase, "all available tools," mean at this point? What's left for the Fed to do? PHILIP JEFFERSON, Former Federal Reserve Economist: Well, what it means is that the Fed stands ready to expand its balance sheet. That is, after you have exhausted interest rates, you ask the question, what can the Fed do? Well, it can buy assets from the private sector.So, for example, one thing that the Fed has done since the fall, and said that they will continue to do, is buy some of these mortgage-backed securities.Another thing that it said that it will explore or certainly keep on the table is buying Treasury long-term debt. And that's useful because it can put some downward pressure on long-term interest rates.The third thing that the Fed said that it will implement today is a program where — they called it the term asset-backed loan facility. And what that is, is a mechanism for providing loans to those who are willing to buy securities backed by consumer small-business loans, and that's going to facilitate some liquidity and extension of loans for households and small businesses.