Any time the chair of the Federal Reserve speaks, it makes news. So it was no surprise that a Reunions webinar between professor Alan Blinder ’67 and Fed chair Jerome Powell ’75 drew a wide audience. The New York Times printed a brief summary of the talk and The Wall Street Journal a complete transcript, while Washington Post columnist Catherine Rampell ’07 live-tweeted highlights.
Powell touched on a number of topics, focusing particularly on the Fed’s response to the COVID-19 outbreak and the associated economic upheaval. Blinder began by asking Powell if he was sleeping well.
“Better than I was sleeping in late February and early March,” Powell replied with a smile.
Addressing the Fed’s efforts to inject liquidity into the financial markets, Powell noted, “our authority is very strong, and at a time like this you are seeing how strong it can be.” He expressed concern that the burden of economic disruption caused by the virus has fallen most heavily on women and low-wage workers in the service sector. “The Fed,” he insisted, “is strongly committed to using our tools to do whatever we can for as long as it takes to provide some relief and some stability now, to support the recovery when it comes, and to try to avoid longer-run damage to people’s lives through long states of unemployment or to their businesses through unnecessary insolvency.”
Asked about the impact should the virus flare up again later this year, Powell answered, “A full recovery of the economy will really depend on people being confident that it’s safe to go out and safe to engage in a broad range of economic activities. … A second wave would really undermine public confidence and might make for a significantly longer and weaker recovery.”
The 43-minute talk, sponsored by the Griswold Center for Economic Policy Studies, was not without its lighter moments. Blinder closed by reading a question from Susan Powell ’20, who asked, “Chairman Powell, do you have a favorite child, and should that favorite child be congratulated on anything?”
“I love all my children equally,” the chairman replied, before congratulating his daughter on her upcoming graduation.