This call if they are interested is a very good book called firefighting summary of the crisis and one called First Responders which is gets in deeply to the individual program. I recommend everyone have a look at it. Over the next couple weeks. Been among other things is a distinguished economic historian, wellsuited to put this horrible event we are experiencing now in context for us. To 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 whats likely to come and whether the covid19 recession will leave longlasting scars on the u. S. And the global economy. I will turn this over to ben for his remarks after which david wessel will pose questions and i think after that there will be instructions on how the audience members can ask their own questions. Then come over to you, thank you for doing this. Thank you glenn, thank you everyone for joining us this afternoon. It feels like a long time ago but january, february, we had a very Strong Economy with 3. 5 percent unemployment rate. Were hopeful at least that the strength of that economy will provide a little bit momentum for the financial reserve to get through this. What has happened is that the world has been hit by the covid19 virus the virus itself is doing great damage but from an Economic Perspective the fact that on essential businesses are being shut down globally is having enormous effect on Economic Activity people are not shopping people are not working people are not going to school work and to see those the effects of that in the data very soon. You need to keep the data into perspective if gdp in the Second Quarter is 10 lower than the First Quarter remember we report on an annual basis multiplied by four very possible we will see gdp numbers in the Second Quarter of 30 or greater. People furloughed from a company are unemployed will they be coming back in the near term with dramatic numbers but i think we wont know for a while how serious and how deep this phenomenon is going to be. Clearly people have made comparisons to the Great Depression. Its not a very good comparison the depression was 12 years long 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 then it is a typical stimulus or antirecession 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 same economy is its duration, how long will it last. The longer it lasts, the more businesses will fail financially will close their doors. The longer it lasts, the more people will lose their jobs and lose association with their former employers the longer it lasts, the more destruction there will be in the harder it will be to come back. The duration is and be critical, the most important determinant of the duration is Public Health response. We are currently in shut down because we are trying to bend the curve we want to get the grate of new cases low enough that people 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 people can go back to work safely and thats going to depend more than anything else on the Public Health response. I think that still a great deal of question about how thats going to go. One scenario is that we partially open up the economy over the summer and perhaps in the fall there is more infection we shut down parts of the economy again overall it could be a very bad year for the u. S. Economy ab will be the most determinant of how long and how deep this downturn is. Having said all that, there are other components to the response in which i am more of an expert. We talked about briefly the fiscal response and spend most of my time on how the reserve is responding to this crisis. Fiscally, what we are not going to be talking here about a stimulus package because the book cant really go out and shop but we are talking about here is emergency relief. What we need to do primarily in the fiscal packages make sure people can survive this period with very low income that business is losing revenue can pay their bills, pay rent, pay utilities so that when the all clear or released to 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 the biggest part of the cares act, the 2. 2 trillion Fiscal Program is trying to provide lifesupport for an economy that is going to be shut down for a while until we have a better grip on the disease. 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 we getting the money people fast enough . Is it enough . There will probably be more coming later but its the right idea to try to help people get to the spirit, the other partners to help businesses survive this period. And that involves focus on grant, large amounts of money for the airline but also credit to help firms pay their bills and remain solvent so they can open up again when the Health Situation is better. I think overall the fiscal policy response, which you can think of as emergency relief package or Disaster Relief has been a good. There are some logistical issues in terms of getting the money out but it has the right shape i suspect it will be more coming later as we help the economy get back to full employment. I would also add that this will be probably almost entirely debtfinanced which in the circumstances i think is probably appropriate. This is why we have the capacity to borrow to deal with these kinds of crisis. Let me talk for the remaining few minutes about the Federal Reserve which has been extraordinarily active and i want to commend jay and his colleagues for being very proactive in trying to address concerns in the economy. The fed has done basically three types of things, each of which has Important Role in supporting our Financial System and economy. The first is supporting market functioning and providing liquidity. This is what Central Banks were created for abas you may know, those listening may know that the fed has been dealing with some of liquidity issues going back into last year when the repo markets were somewhat destabilized the feds was putting liquidity in the system as early as last fall but since then with the pressures on Financial Markets coming from the uncertainty associated with this crisis, there has been a lot of destabilization, the fed has responded in a big way, it has been, for example, buying large amounts of treasuries and securities to help restore good functioning and those chemical markets. It continues to put cash into the system to try to make the repo markets and money markets work better, its opened up discount window so banks can borrow at 1. 41 percent interest as they need liquidity to make loans. Very importantly, the fed has also been providing liquidity in the International System so back in 2008 and the financial crisis, one of the problems around the world was that so many Financial Transactions take place in dollars and the only source of dollars as the Federal Reserve so in order to stabilize money markets around the world, the fed conducted whats called swap operations with 14 other Central Banks. We found ways to provide them with dollars that they could then use in their economies to help stabilize their Financial Systems and that in turn affected u. S. Financial markets. The fed in this instance is also set up swap agreements with 14 Central Banks once again the fed will be acting as a lender of last resort in dollars not just to u. S. Banks and Financial Institutions but essentially to the rest of the world. Its also set up a facility whereby other countries besides 14 can pledge the treasuries they hold get dollars, get cash, and provide liquidity needed within their own economies. The fed is acting very aggressively to make sure theres enough cash and liquidity in the system. Thats the first line. Secondly, the fed has been aggressive on Monetary Policy. They lower Interest Rates, as you know over the summer last year they cut rates three times as insurance and that seemed to be what the doctor ordered so to speak. The Recession Risk at the time fell and it looked like the fed had achieved a soft landing. Now we have a much different situation the fed has cut rates down to the minimal 0 to 25 basis points that we saw in the years after financial crisis it has issued guidance saying basically we are going to keep rates at zero until the economy is clearly back on track and inflation is moving back to two percent. I suspect it will be quite a while. In the asset purchases has been doing at least 500 billion of treasury into hundred billion dollars of mbs, mortgagebacked securities have already been undertaken. That will transmogrified into quantitative easing helping to keep rates low and monetary conditions easing after the crisis the Health Crisis has begun to ameliorate. This is really kind of a twostage process at the moment easier financial conditions are helping the system making it easier for corporations to borrow so they can continue to survive but its not really time yet to stimulate spending and get people to go buy cars and houses that will have to wait until the Health Situation is better at that point Monetary Policy will begin to performance of normal functions. Finally and most innovatively, the fed has been intervening substantially in credit markets. Credit markets have been very destructive by the crisis, by the fact that people are so uncertain about how long it will last the cash flow implications will be so as the crisis began, many many credit markets were disrupted and the fed has borrowed from the feds playbook from 2008 and added quite a few innovations of its own. Borrowing from the 2008 playbook its done really three things, first its created a commercial papers a facility which provides commercial paper, some shortterm lending to corporations to help them finance their inventories and their materials working capital. That was something we did in 2008 on the shelf thats up thats already running. Secondly, there is a money Market Liquidity Fund we also have in 2008 that brought up to allow money markets to sell their securities and reduce pressure on the money markets. Weve seen some run phenomenon and this is been helping there as well this was something we did in 2008 and the third facility we have also planning to reintroduce but not yet socalled term assetbacked securities Lending Facility is used to buy packages of credit to your credit cards, auto loans, Student Loans and a variety of other types of credit to help make those markets more effective. These announcements together with the treasury mortgagebacked securities have already improved credit market functioning considerably. Drawing beyond that the fed is going tohree its 13b Emergency Powers which we use 2008 for the First Time Since the depression. The fed in general has very limited ability to buy access and bank loans but under emergency conditions, socalled unusual accident conditions with the permission of the treasury secretary the fed can essentially lend to anybody, thus the 13 three facility the 13th repower and based on that, they are adding a whole number of lending facilities that will try to ensure that businesses can borrow cheaply and effectively in order to maintain their survival through this period. So whats coming out, there is a two corporate facilities that one that will lend directly to corporations, essentially making loans or buying bonds of corporations to help them to survive the period. A secondary facility that will buy existing bonds trying to improve functioning as a credit markets in the Corporate Bond markets. Thirdly, this is an important and difficult one, departing quite substantially from past experience, the fed is also to be introducing a socalled main street business lending program. Main street is a little bit of a misnomer because its really for middle size firms. 500 to 10,000 employees. The fed will be providing cheap liquidity and perhaps providing protection against risk. The banks will be incentivized to make loans on good terms to these midsized firms. The smallest institutions, the smallest businesses are eligible for loans from the sba, Small Business administration, that began this week. Again, logistics are so important to have been some snafus in terms of getting money out. I hope that will get straightened out. But that is supposed to provide the sba program to supposed to provide cash to smallest businesses on favorable terms and in fact, those loans are at least partially forgivable if the Company SmallCompanies Maintain their payroll. The fed is helping there as well, it announced i think today or yesterday that it will buy sba loans from banks or provide secondary market for those loans making them more liquid and making banks more willing to make those loans. I think the thing to emphasize here is that the fed, with the fed can do is reinforce the private credit markets, the private credit markets are dysfunctional because the leveraging because of uncertainty, the fed can come in and replace those markets to some extent or strengthen those markets and try to bring private lenders back into those markets. The fed does not give away money, the 13 arequirements to require that the fed pay collateral and intend to be repaid but in order to give the fed some protection a big chunk of the money in the Fiscal Program abprovides equity for the lending programs so that if they do lose money, it will be covered by these treasury funds. Again, there has been progress already, we have seen the credit markets improve i think the critical issue will be how quickly the Public Health ab finally, let me point out a been talking about the United States, this is particularly difficult situation because its a Global Situation almost every country in the world is suffering from this pandemic 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 by capital flow outflow from the countries. We may well see emerging market crisis and global recession as well as in the United States. We have a hard roll ahead but im pretty pleased overall with the fiscal monetary responses weve seen were in a need more but at least those authorities have done what they can to help economies stay functional until the Public Health situation gets better. David, i will stop there and be happy to answer any questions. Thank you very much for that. People listening in, we have a number of questions already but feel free to add but to the list by emailing events brookings. Edu. Or on twitter. As you mentioned, the fed increased its Balance Sheet approaching 6 trillion soon twice the size it was when you left the fed in 2014. Is there a limit to how much money the feds can create or reserves to create to purchase u. S. Treasuries and lands for all these emergency facilities . Is there some limit to how much the treasury can borrow to finance this rescue . Theres not technically speaking, theres not really a limit to how big the feds Balance Sheet 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 on the order of 80 or 90 of gdp the size of the bank of japan Balance Sheet. It could be bigger, much of the increase is temporary, for example, a lot of the commercial paper facilities, those are shortterm loans and presumably as things normalize, those loans will be paid back in the feds Balance Sheet will accordingly shrink. I think the fed does have capacity to increase its Balance Sheet. It appears willing to do so significantly and i think thats appropriate. I dont think theres any real danger from that. I dont think, for example, that inflation is going to be a risk, if anything, disinflation, low inflation will be more of a concern in the next year then too high inflation. As far as borrowing is concerned, the federal government is falling a lot, this is when that Borrowing Capacity is so diagonal when you have a National Emergency which of course this is paying for this with taxes would