The Fed can buy any assets it wants. At present, traditional quantitative easing is probably going to be a flop because the purchase of Treasuries will simply add cash to bank excess reserves, and is unlikely to go into the economy. It might make some different at the margins.If the Fed wants to get money where it needs to go, it needs to start buying STATE debt. Of course, that’s only half the equation, because the states for the most part can still float debt. So it needs to be a two-part solution. The states need to change their laws so they can run big, unbalanced budgets, and then take on tons of debt courtesy of the Fed.
Yes, the US would then come to resemble the EU at that point… but at least the states would have the cash to hire back all the workers they’re slashing.