……the precedent here.
I understand that they want to prevent a panic, but this is a short term fix that cannot be supported if the trend continues.
The thing that undermines credibility as much as anything (beyond incompetence in the past by the Fed such as claiming that the inflation was transitory) is the claim that it won’t cost the tax payers a thing. The alternative is to print the money which will worsen inflation and make the tax payers cover it in a less obvious way.
Any money in reserve will have to be replaced. This will end on the tax payers shoulders.