In November, 2017, ten months into his Presidency, Donald Trump picked Jerome Powell, a low-key banker in his sixties, who looks like central casting’s idea of a Wall Street financier, to succeed Janet Yellen as chair of the Federal Reserve. Subsequently, Trump spent more than two years criticizing his own appointee, who is a Republican, for raising interest rates and, then, not cutting them rapidly enough. Last August, Trump referred to Powell as an “enemy.” As recently as the middle of March, he told reporters that he remained unhappy with Powell and asserted that he had the power to “put someone else in charge.”

Things have changed. In the second half of March and into April, as the coronavirus shutdowns threatened to devastate the economy, Powell and his colleagues cut short-term interest rates to zero and rolled out a series of emergency lending programs designed to stabilize the financial system and keep credit flowing to many different parts of the economy. Among the areas that the Federal Reserve, or Fed, has targeted during the past month are the markets for U.S. Treasury bonds, mortgage securities, corporate bonds, money-market funds, and securities backed by auto loans, credit-card debt, and student loans. The scale and reach of these actions have been unparalleled, and the Fed isn’t done yet. It is now finalizing two more big lending programs, both of which are expected to go into operation soon. One is aimed at states and cities that have seen their finances hit by the crisis. The other is intended to assist medium-sized corporations that weren’t covered by the bailouts for small and large businesses that Congress included in the $2.2 trillion CARES Act.

As job losses have continued to reach ever more alarming levels, Wall Street has cheered the Fed’s hyperactivity. Since March 23rd, the U.S. stock market has risen by almost thirty per cent, gaining back more than half of its previous losses, and bond markets, which had been gyrating wildly before the Fed stepped in, have stabilized. Trump has noticed, too. In the last week of March, he told reporters that Powell was doing a “good job” and had “really stepped up.” Since then, the President has omitted the Fed chair from his regular Twitter tirades against those who have displeased him, a list which in recent days has included even Fox News and the staunchly conservative editorial page of the Wall Street Journal.

Higher stock prices won’t offer much consolation to the tens of millions of people who have been laid off or furloughed. But they suggest that the Fed accomplished its first goal, which was preventing a financial cataclysm. During the Great Depression of the early nineteen-thirties, and again during the Great Recession, in 2008 and 2009, initial shocks to the economy—a stock-market crash in 1929 and a housing-market crash in 2007 and 2008—led to the failure of major financial institutions, which caused further panic. Credit seized up, leading to an even deeper economic slump. So far, at least, that pattern hasn’t been repeated. “It’s harder to see the impact of the Fed’s actions on the broader economy,” Tim Duy, an economist at the University of Oregon who writes an influential blog about the Fed, told me. “By holding together the financial markets, it is preventing an even worse outcome. What it is doing is minimizing the risk that you get from a big financial shock that feeds back into the economy and creates a second round of problems.”

The Fed has used some of the same tactics that it used during the financial crisis of 2008 and 2009, such as buying large amounts of Treasury bonds. But it has gone further this time, doing “more than retooling the toolbox,” Donald Kohn, a senior fellow at the Brookings Institution who served as vice-chair of the Fed from 2006 to 2010, told me on Monday. “They’ve taken the tools that we developed, but they’ve also moved on and created different types of interventions.” One innovation that Kohn cited was the new lending scheme for small and medium-sized businesses, which is called the Main Street Lending Program. When it goes into effect, it will represent a novel three-sided partnership. Calling on its electronic printing press, the Fed will provide most of the money for the program, but commercial banks, such as JPMorgan Chase and Wells Fargo, will distribute and underwrite the loans. The Treasury Department will cover any credit losses that are incurred, using funds set aside specifically for this purpose by the CARES Act.

The ultimate goal of the Fed’s new programs is to provide “a bridge to the recovery,” Kohn said. Back in 2007 and 2008, when he was Ben Bernanke’s deputy, the Fed was “wrestling with a financial system that took too many risks,” he recalled. Today, banks and other financial institutions are pretty healthy, Kohn noted. The challenge instead is to keep other types of businesses going and keep households solvent, so that normal economic activities can resume when the shutdowns eventually end. “That involves both the credit system and the fiscal system,” Kohn said.

The amount of money that the federal government is spending in both areas is vast. In four separate bills, Congress has committed more than $2.8 trillion in new spending to address the crisis. The Fed, for its part, has created more than $2.3 trillion in electronic credits and has used the money to purchase various types of securities, which now sit on its balance sheet. Although many economists and investors have praised Powell and his colleagues for the breadth and rapidity of their actions, the Fed’s move into new areas, and the sheer scale of its response, has inevitably created some discord.

In normal times, the main role of the Fed is to attempt to manage a balance of high employment and low inflation, using adjustments in the federal-funds lending rate as its main tool. Since its founding, in 1913, the Fed has also played a key role as the lender of last resort to banks, especially during financial crises. But, since the beginning of the coronavirus pandemic, the Fed “has effectively shifted from lender of last resort for banks to a commercial banker of last resort for the broader economy,” Michael Feroli, the chief U.S. economist at JPMorgan Chase, noted in a research brief. This new role potentially puts the Fed in the awkward position of deciding which entities get access to direly needed credit, and which don’t.

Earlier this month, when the Fed announced its Municipal Liquidity Facility, which will involve the creation of a new entity to purchase state and local bonds, cities with a population of less than a million complained that they were excluded from the program. (On Monday, the Fed announced that cities with five hundred thousand or more residents will be able to participate.) When the central bank launched its Main Street Lending Program, which will provide four-year loans to businesses with fewer than ten thousand employees, colleges and other nonprofit organizations cried foul and asked to be included.

Late last week, Yahoo Finance reported that the Fed was considering the universities’ request, but it’s not clear where it should draw the line. “The Fed is designed to work through the financial markets,” Duy said. “It’s not designed to intermediate loans. That’s the direction they are being pushed in.” Kohn acknowledged the tensions but said that Powell is doing a good job of managing them. Back in 2007 and 2008, when the Fed invoked its emergency lending powers to issue loans to Bear Stearns and AIG, it was accused of bailing out the very financial institutions whose reckless lending had brought on the crisis, Kohn noted. This time the virus is responsible for the crisis, and Powell has insisted that Congress appropriate money to back up the new programs, which means that taxpayers, rather than the Fed, are taking the lending risk. In addition, the commercial banks that issue credit to small and medium-sized businesses will be forced to take a small portion of each loan onto their own books, which will give them an incentive to make sure the recipients are worthy borrowers. “I think he’s doing a great job,” Kohn said, of Powell. “He’s remained calm. He has worked hard to get a consensus. And he has shown that he is open to new ideas and new ways to accomplish his goals.”