Politics aside, I'm not tracking Toomey's economics or the line he's drawing between monetary, credit, and fiscal at ZLB.

Democrats expanding eligibility for these programs doesn't change their underlying economics; the Fed was already doing this during 2020 to no criticism. /1 https://twitter.com/NickTimiraos/status/1340624679179067392

The Fed cut MLF penalty rates 50bp in August. People understood it not as a change in purpose but making it work better.

If a Democratic administration, say, cut that further and extended purchase maturities, it would also be about extent not purpose. /2 https://www.federalreserve.gov/newsevents/pressreleases/monetary20200811a.htm

If underlying idea is that extending credit terms or lowering interest rate that sectors face through public provisioning is "effective fiscal policy"

then all the Fed's actions this year, from going to zero to forward guidance is effective fiscal policy. They all do this. /3

I've had this disagreement with parts of the left as well, where they say prevailing interest rates on March 22nd were just and fair since 'private' market determined them, but were 'subsidized' by Fed programs on the 23rd

as if the rates aren't always determined by the Fed. 4/4