10 Highlights of Former Fed Chairman Ben Bernanke on CNBC – March 25

10 Highlights of Former Fed Chairman Ben Bernanke on CNBC – March 25
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Former Federal Reserve Chairman Ben Bernanke was interviewed on CNBC this morning. Bernanke was Fed Chairman during the Financial Crisis of 2007-2009 and is an expert on the Great Depression.

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(1) Former Federal Reserve Chairman Ben Bernanke expressed optimism about the longer-term picture for the U.S. economy.

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(2) He sees a ‘very sharp’ recession, followed by a ‘fairly quick’ rebound (Sharp short recession in next quarter or two.)  (Sharp recovery in 4th quarter 2020 and 1st quarter 2021)

(3) Interest rates declining for the past 40 years and likely to stay low as a result of a global gut in saving.

(4) Whether or not economy will snap back depends on the course of the virus, and whether we can keep the economy healthy or at least functioning throughout this shutdown period

(5) This is a very different animal from the Great Depression … this has some of the same feel, some of the feel of panic, some of the feel of volatility. But it’s much closer to a major snowstorm or a natural disaster than to a classic 1930s style depression

(6) “We don’t want to put people back to work when the public health situation is still in bad shape,”. “It is important before we put everybody back to work that we feel like we have the public health situation under control.

(7) This is not similar to the Great Depression of the 1930’s which lasted 12 years.  The financial system is strong.

(8) There will be a “very sharp” recession in the next quarter or two, former Fed Chair Ben Bernanke says. “You’re going to see some really scary numbers.”

(9) “Low interest rates are something we’re going to have to live with for a while.

(10) “The infection–so to speak– is going in the other direction from the economy to the financial system (as compared to the Financial Crisis of 2007-2009). “The good news is we came into this with a much stronger banking system.”

CNBC's full interview with former Fed Chairman Ben Bernanke on coronavirus impact

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David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: [email protected] (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.

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