Federal Reserve Chairman Jerome Powell compared the actions the Fed took at the start of the US pandemic to British World War II efforts to evacuate troops to Dunkirk.
U.S. Federal Reserve Chairman Jerome Powell compared the actions the central bank took at the start of the coronavirus pandemic as the U.S. economy headed into a recession to British efforts during World War II to evacuate the troops in Dunkirk.
When asked Thursday in an interview with National Public Radio if he would have done something different in March 2020 if he had had the opportunity, Powell said: “We almost certainly don’t have everything. done right, but we knew early on that we should all of our tools and use them as aggressively and intensively as needed. “
The Fed cut its main benchmark lending rate from a record low of 0% to 0.25%, created a number of emergency lending programs to shore up a shattered financial system, and started buying billions dollars in bonds to keep long-term interest rates low. .
“We knew we would never be able to explain in such an emergency situation why we hadn’t used our tools in this way,” said Powell. “That’s what we did.”
In this environment, with the US economy threatened on several fronts, Powell compared the urgency with which the Fed acted to how the British deployed an impromptu regatta to evacuate thousands of its troops from Dunkirk in France when they were surrounded by German forces.
“It was time to get on the boats and protect people, not check inspection records,” said Powell. “You just have to get on the boats and go. And that’s what we’ve done.
Powell said there may be things the Fed could have done differently, or not at all in retrospect, but overall the effort was a success.
“He achieved his goal by avoiding what could have been much worse results,” said Powell. He credited Congress with quickly passing the CARES (Aid, Relief and Economic Security) law against the coronavirus in the first stage of what ultimately became more than $ 4 trillion in government support to keep the economy from collapsing. into a deeper recession.
