Welcome to this virtual stage our honored guest, Federal Reserve chair, jay powell. At this moment of unprecedented challenge, not only to our Public Health system and our health in general, there is an enormous challenge to our economy and chair powell and his colleagues moved forcefully and quickly in responding to this crisis. Solutions,creative keeping credit flowing to houses and businesses and prepare the economy so they can recover when this virus so it can recover when this virus recedes. And it surely will, ladies and gentlemen. Your work, sir, and that of your colleagues, is far from over, but we are in good hands under your leadership. Indeed, leaders are tested in times of crisis and this crisis tests our leadership in no uncertain terms. You have risen to the occasion. It is safe to say we and all americans have appreciated your calm, decisive leadership in this moment of peril and on behalf of of all of us at brookings, please let me commend you on the powerful example of American Leadership you have set for us all and continue to display every single day as you perform your duties. You are an inspiration and example to all of us. As for today, we will shortly give you the opportunity for your remarks and then i will turn the stage over to my good friend, david, the director of our Hutchins Center on fiscal and Monetary Policy. He will then pose questions directly to you for what i know will be a robust conversation. Again, for everybody on the channel today, thank you for joining us. And for chair powell, thank you, we are honored by your presence. Welcome, chair powell p the floor is yours. Chair powell thanks very much, john, for your kind words. I look forward to davids questions are the challenge we face today is different in scope and character from those we faced before. The coronavirus has spread quickly around the world, leaving a tragic and growing toll of illness and lossoflife. This is first and foremost a Public Health crisis and the most important responses coming from those on the front lines, and hospitals, Emergency Services and care facilities. We watch in collective awe and attitude as these individuals put themselves at risk in service of our nation. Like other countries we are taking forceful measures to control the spread of the virus. Businesses have shuttered, workers are staying home, and we have suspended many basic social interactions. People have been asked to put their lives and livelihoods on hold at significant economic and personal cost. We are moving with alarming speed from 50 year lows and unemployment to what will likely be very high, though temporary levels. All of us are affected, but the burdens are falling most heavily on those least able to carry them. It is worth remembering the measures we are taking to contain the virus represent an investment in our individual and collective health. As a society we should do everything we can to provide relief to those suffering for the public good. The recently passed c. A. R. E. S. Act is important in honoring that commitment, providing two 2. 2 trillion in relief to those who have lost their jobs, low and middle income households and Health Care Providers and state and local governments. There are reports of additional legislation in the works. The critical task of delivering Financial Support directly to those most affected falls to our elected officials who use powers of taxation and spending to make decisions about where we as a society should collect our resources. The fed also contributes by providing relief and stability during this constrained Economic Activity and by using tools to ensure the eventual recovery is as vigorous as possible. To those ends we have lowered Interest Rates to near zero to bring down borrowing costs and we have committed to keeping rates at this low level until we are confident the economy has weathered the storm and is on track to achieve maximum employment goals. More importantly, we have acted to safeguard Financial Markets to provide stability to the system and support the flow of credit in the economy. As a result of the economic dislocations caused by the virus, some essential Financial Markets had begun to sink into dysfunction and many channels that households, businesses and state and local governments rely on for credit simply stopped working. We acted forcefully to get our markets working again and as a result Market Conditions have improved. Many programs we are undertaking to support the flow of credit rely on emergency lending powers available only an unusual circumstances, and only with the consent of the secretary of the treasury. We are deploying lending powers to an unprecedented extent, enabled in large part by the financial backing from the congress and treasury. We will continue to use these powers forcefully, proactively and aggressively until we are confident we are on the road to recovery. I would stress these are lending powers not spending powers. The fed is not authorized to grant money to enter for sherries, only solid entities with the expectation the loans will be fully repaid. In the situation we face today many borrowers will benefit from these programs as well as the overall economy. There will also be entities of various kinds that need direct fiscal support rather than alone they would struggle to repay. Our emergency measures are reserved for truly rare circumstances such as those we face today. When the economy is well on its way back to recovery and institutions are able to perform vital functions of channeling credit and supporting economic growth, we will put these tools away. None of us has the luxury of choosing our challenges. Fate and history provide them for us. Our job is to meet the tests we are presented. At the fed were doing all we can to shepherd the economy through this difficult time. When the spread of the virus is under control, businesses will reopen and people will come back to work. There is every reason to believe the economic rebound when it comes can be robust. We enter this turbulent period on strong economic footing and that should support the recovery. In the meantime we are using tools to build a bridge from a Solid Economic Foundation on which we entered this crisis to a position of regained economic strength on the others. I want to close by thanking the millions on the front lines, those working in health care, sanitation, transportation, grocery stores, warehouses, deliveries, security, including our own team at the Federal Reserve, and countless others. Day after day you put yourself in harms way for others to care for us, make sure we have access for things we need and to bring us through this difficult time. Thank you, and david, i look forward to your questions. David i am the director of the Hutchins Center at brookings. I appreciate your remarks and want to enforce the point you made at the end that a lot of us have the luxury of working from home remotely but there are a lot of people who do not and they have been often forgotten in the past and we celebrate the work they are doing today. I have a number of questions of my own and some we have gotten from people sometimes in by email or twitter. In the past three weeks more than 50 Million People have filed initial claims for unemployment. That is huge. We know the Second Quarter will be awful, but i wonder if you could help us look ahead. You and your formidable crew of economist, what are we seeing the rest of this year. You expect a robust recovery in summer or fall . Chair powell we have terrific economist with different specializations. It is an honor to work with them. If you ask them today what their expectation is for the economy the rest of this year they will tell you it depends on the path of the coronavirus. How quickly will it spread, get it under control, how quickly can we reopen the economy with confidence. Businesses can reopen knowing it is safe. That is the thing. These are not typical economic questions they are skilled at answering. I would say generally my expectation is that the Second Quarter will be a weak one because businesses are shut down. Workers are working from home or are furloughed or laid off or the business they work at is closed for the time being. We expect big increases in initial claims for unemployment during the Second Quarter. When the virus does run its course and it is safe for businesses to open, we would expect a fairly quick rebound as people do go to work and to start resuming normal levels of Economic Activity. I think most people expect that to happen in the second half of this year, which ends on june 30, to be precise about where that would be i would say it does depend on people staying home, staying healthy, doing everything we can to keep the virus under control. The more we do that, the safer it will be to go back to work. David thank you. Hundreds of billions worth of mortgages and learning. You launched alphabet soup of programs for businesses that could lend up to 2. 3 trillion. Is there a limit to how much the fed can create and lend without having unwanted side effects like inflation or price bubbles . Chair powell these programs we are using, under the law, we do these with consent of the treasury secretary and with fiscal backing through the congress and treasury and we are doing it to provide credit to state and local governments as we are directed by congress. We are using that fiscal backstop to absorb losses we have had and what were doing is looking for places that are very important to the real economy, things that affect peoples lives and economic output and where credit has broken down. That is what i mentioned. That is essentially what we are doing and we can keep doing that as long as those needs arise. Our ability to do that is limited by the law. We have to find unusual and exigent circumstances, the secretary has to agree and we are using this fiscal backstop. There is no limit other than it must meet the test under the law as amended by dodd frank. David isnt there a risk with all of this money coming out of congress, that we will end up with something we do not like, as in more inflation, or active price bubbles . Chair powell inflation has been an interesting phenomenon. Back when 12 years ago when the financial crisis was getting going and the fed was doing quantitative easing many feared the increases in the money supply as a result of quantitative easing, asset purchases, would result in high inflation. Not only did it not happen, inflation has been below our target. That is globally, the challenge has been inflation below target. Honestly, it is not a firstorder concern for us today that too high inflation might be coming our way in the near term. Far from it. These are programs we are developing at a high rate of speed. We do not have the luxury of taking our time the way we usually do. Were trying to get help quickly to the economy as it is needed. In hindsight you will see that we could have done things differently, but one thing i do not worry about is inflation right now. David a number of people wrote questions that go something like, think of somebody who works at a small restaurant, she has lost her job, the restaurant is closed. For how long nobody knows. All the things you are doing, how do they help people like her, the owners of that small restaurant and the millions of people like her in that position . Chair powell she sounds very typical of what many people are unfortunately enduring at the moment. I would say the most important thing she can do is stay home and stay healthy. The more people do that, the sooner we will get control of the spread of the virus, the sooner we can go back to work. It is also important our Health Care Authorities develop a plan for that to happen in a careful way that does not result in another outbreak and then we have to go to square one. In the near term the biggest relief she will get will probably be from the expanded Unemployment Insurance under the c. A. R. E. S. Act, which i think added 600 per week for peoples Unemployment Insurance. She will probably find it is hard to get access to that right away because there are so many newly Unemployed People that there are backups at the unemployment office. She will get that money, it may take a few weeks longer than it should. What is the feds role . It is to provide stability and relief during this period when the economy is partly shut down. That involves keeping Interest Rates low. If she has a mortgage or Credit Card Debt she will see lower Interest Payments for that. As you mentioned we have used our tools to keep Financial Markets functioning. That will avoid further damage to the economy. The most important thing we can do while providing stability is to support a robust recovery when it does come. That is what our tools are most important for. David you mentioned congress has done quite a bit. You mentioned correctly you do not do taxes and spending. But everyone, including congress, looks to you for advice. In your judgment, do we have to do a lot more on the fiscal policy front to respond to this crisis . Chair powell as you know, we are not responsible for fiscal policy, we do not give public advice to congress on fiscal policy. As i mentioned in my remarks, in many cases, what people need is direct fiscal support rather than alone. What we can do is loans. There is a big need for fiscal policy. I hear many voices on both sides of capitol hill and both parties talking about further support. I do think that is likely to be appropriate. They will have to decide what that might be, but you already here further funding for the smalls nests sba loans and perhaps more direct funding for states and hospitals. Again, not our job but i would see that is more likely than not to be needed. David and a good idea . Chair powell absolutely. Broadly people are undertaking these for the common good. We should be doing that as a society. Their businesses did not close because of anything they did wrong. This is what the great fiscal of the United States is four, to protect these people as best we can from the hardships they are facing. David congress allocated in the c. A. R. E. S. Act 450 Million Dollars to backstop emergency lending. If i did my arithmetic right you used 195 million about for programs you announced this morning. What our priorities for the rest of that money . Chair powell our priority for all of it is the same and that is, what has happened in our big, complicated economy and Financial Markets and banking system, we rely on those who have funds to lend through various channels to those who are borrowing and what happened when the spread of the coronavirus around the globe became clear, investors all over the world really struggled to assess what that meant for the economy and they pulled back from other kinds of investment and really went to the safest shortterm investments like tbills. The result was many parts of the Capital Markets and lending more broadly stopped functioning and that is exactly the situation our Emergency Powers are meant to address. We have moved. Our priority are those areas of the market most fundamental to supporting the real economy. You see the programs. We have announced nine different facilities. Those are really the Priority Areas where we thought that help was needed. As we identify other areas, we will not hesitate to move into those areas. In addition, we may find some of the programs we announced need adjusting and need to be larger or did not need to be as large as we thought or need to be changed. We will watch all of that and very much willing to adapt. David there is a consensus during the Global Financial crisis a decade ago that banks were allowed to deplete their capital by paying dividends for too long. Several big banks suspended by backs to preserve capital. I am curious why no one has directed them to suspend their common dividends as well . Chair powell maybe i will start by saying businesses distribute earnings to their shareholders through buybacks and dividends. It is just a way of saying that the owners may have better use for those funds than the business does. It is a perfectly normal thing in our capitalist system. Our largest Financial Institutions do about 70 of those distributions through share repurchases. Our eight largest most systemically important institutions stopped at distributions through that channel as have other large regional banks that make up a big part of the banking system. That is a good thing. They have not stopped dividends. In my way of thinking, i do not think it is something that needs to be done at this point. Our banks are highly capitalized with more highquality capital then we were before the financial crisis. We will be watching to see how things evolve, but i do not think that step is appropriate at this time. David one of the things that distinguishes [indiscernible] is what is going on in the Mortgage Market. We saw a spike in deliquencies. It is hard for people to buy and refinanced mortgages. Do you think there are steps that need to be taken now by the government to make sure a mortgage crisis does not make recovery slower than need be. Chair powell i think the c. A. R. E. S. Act does provide a moratorium, but you are right, the Mortgage Market is important for the real economy. That is why we bought so many mortgagebacked securities at an aggressive pace. We feel that market is where a lot of individual markets wind up is functioning more properly. We are watching the situation with mortgage servicers and i will tell you we certainly have our eyes on that as a key market that does support households and consumer spending, which is 70 of the economy. We will be watching that carefully. David understand Steven Mnuchin said it may be ready to be reopen by may when the president feels comfortable with the Public Health stuff, does that seem right to you . Is not aell that judgment assigned to the fed to make. That is a judgment that has to be made starting with health officials. I think it is time to have a serious public conversation and a lot of analysis about that. We need to have a plan nationally for opening the economy. We all wanted to happen as quickly as possible. We all want to avoid a false start where we partially reopen and that results in a spike in the coronavirus cases. Then we have to go back to square one. We all want to avoid that. I would really rely on the medical experts principally and that will be a decision for other parts of government. I wouldnt you think a little bit about the other side here. What are you going to be looking at to decide whether it is time for you to pull back these facilities and begin to tighten again. We tend to move gradually and predictably. I think we will be looking to economy is well on the path to recovery. We will be in no hurry to pull back on our asset purchases or on these programs. They are tentatively scheduled on september 30, if they have to go longer than that of course they will. We have to make sure the economy is really on a solid footing before we start pulling back. When we pull back we do so very gradually. Thick about the way we ended our qualitative easing back in 201314. We did over the course of a full year. Playbook ofow the gradual moves and we wont start them until it is time to do so. A time in which we are confident in the economy is on solid footing again. David a number of people have rely onether you will shortterm Interest Rates in the yield curve control kind of thing. Would you consider that . Chair powell we have done a lot of thinking about what Monetary Policy might look like. , we think our Monetary Policy is just in the right place. We have rates at zero and said zeroll hold them close to until we are sure the economy has weathered the storm. That we think is exactly where it should be. The principal focus is not on anusting what we see as inappropriate Monetary Policy at least the next few months. The principal focus is lending programs and making sure credit does flow in the economy. We saw what happens when the Credit System breaks, it could really inflict greater damage on the economy. Continue to do that. The credit is flowing. Households, businesses, local governments as requested by Congress Area that is really the main focus now. Things we are thinking carefully about what that might look like in the future. Not something we are thinking would be appropriate. Are you at all worried about the Federal Reserve, which is largely elected officials making decisions about who could borrow into could not . This is an area the globalg financial crisis that ended in 2010, the fed made those decisions and did so with consultation with the treasury department. One of dodd franks interventions was to say that we could only use these extraordinary powers with the consent of the treasury secretary. I think that is a wise decision. Decisions of this magnitude really should there should be some accountability at least for those who are elected by the public. We are not elected by the public. That is the administration in the form of the treasury secretary. That is a healthy thing but there will be some connection to elected officials. That is a wise move on the part of don frank. Frank. We dont make decisions about individual firms. We are only allowed under dodd frank to have programs of eligibility, classes of borrowers. Any borrower that meets the eligibility requirement for one of these facilities can take part in the facility. We will not be picking this ferment but not that farm. It is brought eligibility. It will not be that. There are overlapping spears here. The fed has complete authority over Monetary Policy. Fiscal stability is something. Here we have a stake that has been a very productive relationship. David i wonder if you could speculate little bit about how . He economy will be different we will have a lot more debt. Of lifehink our way will change . You have thoughts on that . Our main focus is on the near term. These are great questions. Behavior will change , people will start to go back to movies, theaters. That process could be fairly short. At the beginning it will certainly be gradual and tentative. Changesre be longer run in our behavior . I dont know. That is a great question. We will have to see. I thick a lot of people are scared now. A pandemic like this that is causing the economy to stop and people will be afraid of interacting with neighbors. Know our leaders are confident to get through this. Want to give you this opportunity to reassure people about what lies ahead. Chair powell this is going to be and is going to be a very difficult time for many people. People are getting sick. Loved ones are getting sick. People are getting furloughed and laid off. People who started businesses are being shuttered. I wouldnt want to say anything that diminishes the suffering that people are feeling at all. It is going to be a tough time. Tothe government continues give people support they need. If people stay home and stay healthy until it is appropriate to go back to work and if the Health Care Policy experts devise a plan for a good way to go back to work and reopen the economy. If we do open those things, there is every reason to think we could be back on the road to recovery fairly quickly. I thought chairman bernanke he said it well the other day when he said that if we do those things you will be looking back on this and you wont see much, only modest effects on the economy from this event. I think that can be the case if we do the things i mentioned. David thank you very much for your time today. I think everybody for watching. If you continue the important jobs of steering the economy through this. You very much. Monday night on the communicators, American Eagle liberties founder, sarah miller, and Big Tech Companies as monopolies and the impact of corporate concentration. There are a couple of strategies if you are a tech company. Will you sell to google or facebook . That has wind innovation for selleck and valley. Instead silica and valley. Wonderingveryone is how to develop something for facebook or google to buy. That is not how we want an economy or in Innovation Sector to function. Watch the communicators monday night on the communicators. New York Governor Andrew Cuomo talked about the states the coronavirus pandemic. Governor cuomo good morning, happy saturday. Who is enjoying holy week . We wish them happy passover. Holy saturday coming easter is tomorrow. The big day. Let us go through where we are right now. Thegood news is the curb of increase continues to flatten. The num