Now consider this- the main thing interest rate policy does is move income between savers and borrowers.
For example, in the last year or so savers have gone from earning maybe 4.5% to something near 0 today. And borrowers (and lenders making larger spreads) have equally benefited.
So what I’m getting at is the Fed has the authority to shift mega sums from savers to borrowers, and vice versa.
That’s like giving the social security commissioner the authority to raise payroll taxes and pay out more benefits, etc.
Not to mention the swap line authority where the fed can lend unlimited sums to foreign governments, and on an unsecured basis as well.
The real ‘power’ of the Fed is with these powers of distribution, which far outweigh the generally perceived power of altering the macro economy via changes in interbank interest rates.