Jerome Powell's importance fades with passage of Biden's stimulus plan

One sign that the stimulus has partially sidelined America's central bank is the way in which the government is taking over some of the crisis lending functions that until recently were the remit of the Federal Reserve.

How it works: The American Rescue Plan provides $10 billion for the State Small Business Credit Initiative (SSBCI), allowing states to lend 10 times that amount to small businesses.

• The SSBCI lending comes on top of the $12 billion that was earmarked in the December stimulus for community development credit unions and other minority-focused financial institutions. That money, too, will end up being multiplied many times over.

The big picture: By giving the money out directly to states and financial institutions, rather than backstopping lending facilities at the Federal Reserve, the most recent stimulus bills keep the Fed at arm's length from the rest of the government.

• It's a stark contrast with the close working relationship that former Treasury Secretary Steven Mnuchin first initiated and then ended under former President Trump.

Between the lines: While the Fed might not make private-sector loans any more, it's still spending $120 billion per month buying up Treasury bonds and government-backed housing bonds. That's a lot of money, but it doesn't even cover the previous deficit, let alone the $1.9 trillion that the new stimulus act is going to cost.