Outside of the big picture questions that professor Sowell has pointed out regarding the federal reserve there are several questions that can be asked about our Feds current state.
The fed now holds nearly one trillion in mortgage backed securities. Are these securities safe and what would happen to the fed and other banks if there was another crisis due to a collapse in this market?
The fed has held interest rates at rock bottom lows and at the same time has been gobbling up assets. They now hold 3 trillion in assets. When interest rates do rise these assets will loose a lot of value. How will this affect the economy and the Feds ability to conduct monetary policy without printing/borrowing?