Some estimates on what the Fed can do:
The embrace of QE Infinity is clearly a groundbreaking move. But is QE Infinity limitless in reality? No quite.
Analysis done last week by Bank of America Securities shows the Fed could spend up to $US8 trillion.
The bank says the Fed holds 15 per cent of marketable US debt excluding bills, noting that it holds a large portion of debt with maturities of between 15 years and 22 years.
Noting the Fed's 70 per cent limit on holding each issue leads Bank of America to conclude $US8 trillion is the potential upside number.
However, the Fed is limited to $US1.5 trillion in US Treasuries with a maturity of 15 years or more.
At this point, the Fed has committed to not buy government debt in the primary market.
That means it won't buy debt freshly issued by the US Treasury, of which there is a likely tsunami coming given the big ticket stimulus set to flow through the economy once Congress gets its act together for the sake of avoiding an economic catastrophe.
But until that stimulus gets approved, the Fed is set to shoulder the responsibility to support the faltering US economy and a highly stressed financial system by itself.
But the reality is that unconventional monetary policy can't do it alone. The Fed can do a lot but it legally can't put money directly into the pockets of Main Street.
(Obviously that was written before the $2T stimulus by Congress, but the latter doesn't seem to impact the analysis of what the Fed can do.)
Also, if I'm not mistaken, [for comparison] the Bank of Japan didn't shy from buying their government's bonds, so the BoJ ended up owning 45 percent of the Japanese government bond market by 2018; it was actually a bit more before, two thirds in 2016.
Note that what the Federal gov't as a whole can do vs what the Fed can are somewhat different questions.
If we consider that Trump ordered GM to start making ventilators, the gov't (but not Fed alone) can surely create supply as well, of the stuff they need. (This obviously comes with opportunity cost, like most government [direct] interventions in the economy.)
And if you somehow care about the current pace of the Fed...
They couldn’t buy \$75 billion a day forever, so “stepping it back slowly” to $60 billion “makes sense,” said Thomas Simons, a money market economist at Jefferies LLC. “They’ve been having a few of the purchases under-subscribed so that’s a sign they don’t have to go full bore.”
At this pace the Fed will have bought almost $1 trillion dollars of Treasuries by end of next week.