One from scratch. A few of us expected that his successors would need to refer to it so soon but generally for all of us he left a copy for jay powell that i would recommend for people on this call if theyre interested. Theres a good book called firefighting which is a summary of the crisis and one called First Responders which gives deep into the individual programs and i recommend everyone have a look at it over the next couple of weeks. And among other things its a distinguished economic historian suited to put this horrible event that we are experiencing in context so it will give us a sense today of what will determine how deep this recession will be, perhaps how long it will last , how effective the fiscal and Monetary Policy response has been and perhaps whether the covid19 recession will leave longlasting scars on the us and Global Economy so ill turn this over to ben or his remarks after which david wessel will pose some questions and after that i think there will be some instruction on how audience members can ask their own questions though ben, over to you and thank you for doing this. Thank you for joiningus this afternoon. It seemed like a long time ago now back in january and february we had a Strong Economy with a 3 and a half percent Unemployment Rate and we are hopeful that the strength of the economy will provide a little momentum or financial reserve must get through this training but what happened is the world have been hit by the covid19 virus and the virus itself is from an Economic Perspective the fact that unessential businesses are being shut down globally is having an enormous effect on Economic Activity. People are not shopping, people are not working, people are not going to school and we going to see the effects of that in the datavery soon. The data in perspective. Gdp is set 10 percent lower than the first quarter, we record on an annual basis and multiply by four, its possible we will see gdp in the Second Quarter and the magnitude of 30 percent or greater. Unemployment in the shortterm, people furloughed from acompany, the unemployed, will they be coming back . We will see dramatic numbers but we wont know for a while how serious and how the this phenomenon is going to be. Clearly people have made comparisons to the Great Depression. Its not a good comparison. The depression was 12 years long and it came from financial crisis. It came from manmade, human made errors and decisions. This is more like a Natural Disaster and the response is more like emergency relief and it is a typical stimulus orantirecessionary response. Having said that, the critical factor in terms of how bad this is going to be, how much imprint it will leave on the us economy is its duration. How long will it last . The longer it lasts the more existing businesses will fail financially, willclose their doors. The longer it lasts the more people will lose their jobs and lose their association with their former employers. The longer it lasts the more destruction there will be and the harder it will be to come back so the duration will be critical. The most important determinant of the duration is the Public Health response. We are currently in shut down because we are trying to bend the curve. That means we want to get the rate of new cases low enough thatpeople can feel confident , that the system can handle the cases. We want to add palliatives and medicines and treatments. We want to test and trace, we ultimately want to be able to feel that people can go back to work safely. And that is going to depend more than anything else on a Public Health response and i think thats still a great deal ofquestions about how thats going to go. One scenario is that we partially open up the economy over the summer. And that perhaps in the fall theres more infection and we shut down part of the economy again so overall it could be a very bad year for the us economy but again, the Public Health response and our ability to make sure that the hospitals have the equipment they need and the scientific establishment is putting all its resources into addressing this disease will be the most important determinant of how long and how deep this downturn is. Having said all that, there are other components to the response and which i am more expert, let me talk about briefly the physical response and then most of my time on how the Federal Reserve is responding to this crisis. Fiscally again where not really talking here about a stimulus package because people really go out and shop. What were talking about his emergency relief. What we need to do in the fiscal package is to make sure that people can survive this period without low income, that businesses losing revenue can pay their bills, pay the utilities but that when all clear to sounded or at least the partially clear is sounded they can open up again and we can restore Economic Activity. That is a big part. Besides the part of the Fiscal Program that addresses health needs, the biggest part of the cares act, the 2. 2 trillion Fiscal Program is trying just to provide support for an economy that is going to be shut down for a while until we have a better grip on the disease. So the money is going into direct payments to individuals to help them get through this period. I think the main issues there are logistical, are getting the money to people fast enough is enough, so it would be more coming later but its the right idea, try to help people get through this area and the other parties tohelp businesses survive. And that involves both some grants for large amounts of money for the Airline Industry for example but also credit to help firms pay their bills and remain solvent so they can open up again when the Health Situation is better. So i think overall, the fiscal policy response which you think of as an emergency relief package or Disaster Relief has been pretty good. There are some logistical issues in terms ofgetting the money out. But it has the right, i suspect it will be more coming later as we help the economy get back to full employment. And i would also add that this will probably be almost entirely debtfinanced which in the circumstances i think is probably appropriate. Which is why we have the capacity to borrow to deal with these times of crisis. Let me talk with the remaining few minutes about the Federal Reserve which has been active and i want to commend jay powell and his colleagues for being very proactive in trying to address concerns in the economy. The fed has done basically three types of things. And each of which have important roles in supporting our Financial System and our economy. The first is supporting market functioning and providing liquidity. This is what Central Banks were created for. This is what the fed look for in 1913 and as you may know those listening may know the fed has been dealing with some issues going back into last year when the repo markets were somewhat destabilized. The fed was putting liquidity in the system asfar as last fall but since then , with pressures on Financial Markets coming from the uncertainty, associated with this crisis, theres been a lot of destabilization. The fed has responded in a big way. It has been for example by and buying large amounts of treasuries in mortgagebacked risk for securities to restore function. It continues to put cash into the system to try to make the repo markets and money markets work better. It opened up its discount windows that banks can borrow one 12 45 percent. Interest as theyneed liquidity , to makeloans , very importantly, the fed has also been providing liquidity in the International System so back in 2008, in the financial crisis, one of the problems around the world was that so many Financial Transactions take place in dollars and course the only source of dollars is the Federal Reserve so in order to stabilize money markets around the world the fed conducted whats called slop operations with 14 other Central Banks meaning that we found ways to provide them with dollars that they can then use in their economies to help stabilize their Financial Systems and that in turn affected us Financial Markets. The fed in this instance has also set up swap agreements with 14, 14 Central Banks so once again the fed will be acting as a lender of last resort in dollars not just the us banks and Financial Institutions but essentially to the rest of the world. Its also set up a facility whereby other countries decides 14 and pledge treasuries that they will get dollars, get cash and once again provide liquidity as needed within their own economies so the fed is acting very aggressively to make sure that theres enough cash, enough liquidity in the system. At the first line. Secondly, the fed has been aggressive on Monetary Policy. The lowered Interest Rates. As you know over the summer last year they lowered rates three times as insurance that seemed to be what the doctor ordered so to speak. And then this Recession Risk at the time fell and it looked like the fed had achieved a soft landing and now we have a much different situation. The fed has cut rates down to the minimal euro over 25 basis points we saw in the years after thefinancial crisis. It has issued full guidance saying basically that are going to keep rates at zero until the economy is clearly back on track and in places moving back to two percent i suspect that will be quite a while and the asset purchases its been doing at least 500 million of treasuries and 200 billion and the s securities have been undertaken. That will transmogrify into wanted to easing. Again helping to keep rates low and monetary conditions easing after the crisis. The Health Crisis had begun to evaluate so this is really kind of a twostage process. At the moment easier financial conditions are helping the system easier for example for corporations to borrow so that they can continue to survive but not really time yet to stimulate spending and get people to go out and buy cars and houses to read will have to wait until the situation is better and at that point Monetary Policy will begin to perform its normal function. Finally and most innovatively , the fed has been intervening in substantially in credit markets. So credit markets have been very destructive by the crisis, by the fact that people are so uncertain about how long it will last, whats the cash flow implications so as the crisis began, many many credit markets were disrupted and the fed as glenn said as borrowed from the feds playbook from 2008 and then added quite a few innovations of its own. Borrowing from the 2008 playbook, its done really three things. First its created a commercial paper facility which provides commercial paper, shortterm lending to corporations to help them finance their interview carries andmaterials, their working capital. That was something we did in 2008. Thats onthe shelf , that is already running. Secondly there is a money Market Liquidity Fund that we also had in 2008 that brought up to allow money markets to sell their securities and reduce pressure on the money markets read we seem the same phenomenon money market mutual funds which has been helping there as well so its something we did in 2008 and that third facility that we had also lining to reintroduce but not yet, socalled assetbacked securities led the facility and is used by packages of credit, consumer credit, credit cards, Student Loans and a variety of other types of credit to help make those markets more effective. So these announcements together with mortgagebacked securities have improved credit functioning considerably. Going beyond that the fed is going to use its 13 three Emergency Powers which we used in 2008 for the First Time Since the depression. The fed in general has limited ability to buy assets and make loans, under emergency conditions the unusual and exigent conditions and with the permission of the treasury secretary and essentially lend anybody. Whats coming out is two corporate facilities and one that will lend equity to corporations, essentially making loans or buying bonds of corporations again to have them to survive. Theres a second or facility that will buy existing bonds trying to improve the functioning of the credit markets and the Corporate Bond markets. And then thirdly, this is important, from past experience the fed will be introducing a socalled main street business lending program. Main street is a bit of a misnomer because its really for middle sized firms, 500, 10,000 employees and the fed will be doing and we dont know the details yet but they will be asking banks to make loans to the midsize firms and the fed will be writing cheap liquidity and provided protection against risks some banks were incentivized to make loans on good terms to these midsized firms. The smallest institutions, smallest businesses are eligible for loans from the sba. That began this week. Again logistics are so important. There have been in terms in the money out. I hope what i get straightened out. But that is supposed to provide the sba is program is supposedo provide cash to the smallest businesses on favorable terms and, in fact, those loans only partially forgivable if the companies, Small Companies maintain their payroll. The fed is helping there as well. It announced just today or yesterday that it will buy sba loans from banks or provide a secondary market for those loans making the more liquid and making banks might want to make those loans. I think the thing to emphasize is that the fed, what is the fed can do is reinforce the private credit markets. They are dysfunctional because the leveraging come because of uncertainty, but that can come in and replace those markets to some extent or strengthen those markets and try to get private lenders back into those markets. The fed does not give away money. The 133 requirements to require the fed pay collateral and intend to be repaid, but in order to give the fed protection a big chunk of the money in the Fiscal Program, 465 billion essentially provides equity for the feds lending programs so that if they do lose money it will be covered by the treasury funds. So again, there has been progress. We have seen credit markets in peru. I think the critical issue of the how quickly the Public Health situation prince and that will in turn depend on logistics of disturbing equipment and gear, ventilators, as well as the scientific effort we really need to get control of this. Finally let me just point out that would be taught and trained, it is a global situation. Almost every country in the world is suffering from this pandemic. And almost all have chosen to significantly reduce Economic Activity so this will be a global recession. The situation is being worsened by a strong dollar, by falling Commodity Prices, so we may well see an nation market crises and global recession as well as in the United States. We have a hard road ahead but i am pretty pleased over all with the fiscal and monetary responses we have seen. We are going to need more but at least those authorities have done what they can to help our economy stay functional until the Public Health situation gets better. So ill stop there, david, and be happy to answer any question questions. Thank you very much for that. People listening, we have a number of questions already but feel free to add to the list by emailing events at brookings. Edu on twitter or hashtag covid19 economy. As you mention, ben, the fed has aggressively increased its Balance Sheet. Its now approaching 6 trillion, twice the size when you left the fed in 2014. Is a limit to how much money the fed can create or reserves if you agree to purchase u. S. Treasurys and blend for all of these emergency facilities . Is there some limit to how much the treasury can bar to finance this rescue . There is not technically speaking to start a limit to a big the ballot she can get. At 6 trillion this would be about 30 or less of u. S. Gdp. In japan, i dont know the exact number but in the order of 80 or 90 of gdp the size of the bank at japans Balance Sheet. That could be better. Much of the increase is temporary. For example, a lot of the state commercial paper facility for example, a shortterm loans and presumably as things normalize those loans will be paid back in the fed Balance Sheet will accordingly shrink. I think that that does have capacity to increase its Balance Sheet, and it appears to be willing to do so significantly. I think thats appropriate. I dont think theres any real danger from that. I dont think that inflation is going to be a risk. If anything, lower inflation would be more of a concern the next year that too high of inflation. As far as borrowing is concerned, yes, the federal government is borrowing a lot. Again as i mentioned this is when the Borrowing Capacity is so valuable w