- Previous Federal Reserve Chairman Ben Bernanke communicated good faith about the more drawn out term picture for the U.S. economy.
- While the nation is in for a “sharp, short” recession,” he sees a “fairly quick rebound” ahead.
- Bernanke guided the Fed during the budgetary emergency and going with Great Recession.
Previous Federal Reserve Chairman Ben Bernanke sounded an idealistic tone on the more extended term condition of the economy, anticipating in a talk with Wednesday that while the U.S. is confronting an intense downturn, it shouldn’t last.
“It is possible there’s going to be a very sharp, short, I hope short, recession in the next quarter because everything is shutting down of course,” he said on “Squawk Box.”
“If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound.”
During the monetary emergency that detonated in 2008, Bernanke guided the Fed through its endeavors to spare the economy. He was the primary national bank executive to pull its benchmark loan cost down to approach zero, and the Bernanke Fed actualized a large number of projects that have been revived to manage the present emergency.
While he guided the Fed through the money related emergency and going with Great Recession and is perceived expert on the Great Depression, he said the present circumstance looks to some extent like those two periods.
“This is a very different animal from the Great Depression” which he said “came from human problems, monetary and financial shocks. This is has some of the same feel, some of the feel of panic, some of the feel of volatility that you’re talking about. It’s much closer to a major snowstorm or a natural disaster than a classic 1930′s-style depression.”
Truth be told, he stated, the present circumstance is nearly something contrary to the money related emergency, where issues in the financial framework tainted the more extensive economy. This time, issues in the more extensive economy welcomed on by the coronavirus are contaminating the banks.
He focused on the significant of getting the coronavirus itself calmed down with the goal that arrangement can accomplish its work.
“Nothing is going to work, the Fed is not going help, fiscal policy is not going to help if we don’t get the public health right, if we don’t solve the problem of the virus, of the infection, so making sure that the risk has declined sufficiently before put people back in the line of fire,” Bernanke said.
“So I think the public health is the most important one,” he added. “If we can get that straight, then we know how to get the economy working again. Monetary and fiscal policy can do their thing and we won’t have anything like the extended downturn we saw even, I don’t think, in the Great Recession, much less the Great Depression of the ’30s.”
Prior Wednesday, St. Louis Fed President James Bullard communicated comparable opinions about the economy, disclosing to CNBC he expects a major transient hit yet a solid bounce back.
He applauded the work being finished by Chairman Jerome Powell and the remainder of the present Fed.
The Powell Fed has pulled benchmark acquiring rates down to approach zero and executed a large number of projects planned for keeping liquidity streaming to the budgetary framework and organizations.
“I think the Fed has been extremely proactive, and Jay Powell and his team have been working really hard and gotten ahead of this and shown they can set up a whole bunch of diverse programs that will help us keep the economy functioning during this shutdown period, so that when the all-clear is sounded, we will have a much better rebound than we otherwise would,” Bernanke said.