New York: Former Federal Reserve Chairman Ben Bernanke sounded an optimistic tone on the longer-term state of the economy, predicting in a CNBC interview Wednesday that while the U.S. is facing an acute recession, it shouldn’t last.
“It is possible there’s going to be a very sharp, short, I hope short, recession in the next quarter because everything is shutting down of course,” he said. “If there’s not too much damage done to the workforce, to the businesses during the shutdown period, however long that may be, then we could see a fairly quick rebound.
While he guided the Fed through the financial crisis of 2008 and accompanying the Great Recession, he said the current situation is almost the opposite of the financial crisis, where problems in the banking system infected the broader economy. This time, issues in the broader economy brought on by the coronavirus are infecting the banks.
He stressed the important of getting the coronavirus itself under control so that policy can do its work.