Ben Bernanke Sees a Big If on the Path to Recovery
In a Q&A the former Fed chief says the central bank is doing most of what it can. But unless the pandemic is brought under control, the recession will drag on.
What a relief.
Photographer: Alex Wong/Getty Images North AmericaThe Federal Reserve has stepped in to save the economy again, this time from the coronavirus pandemic. Not only did it cut interest rates to almost zero, but it unleashed a barrage of new programs to prop up financial markets, and bail out investors and businesses that borrowed too much before the U.S. economy shut down to contain the outbreak. There is precedent for this: On a smaller scale, the Fed came to the rescue in the midst of the 2008 financial crisis. Few know more about central bank bailouts than Ben Bernanke, who led the Fed during that time. Bloomberg Opinion columnist Noah Smith interviewed him online last week. Below is a lightly edited transcript of their conversation.
Noah Smith: The Fed has been extremely proactive during the coronavirus crisis -- increasing its balance sheet by more than in the Great Recession, indirectly purchasing corporate debt, lending to small businesses and so on. Is this enough? Was the Fed sufficiently bold this time around, or could it have done even more?