“Even if our economy is not in recession right now, it will enter soon. At best, we will experience a slight recession as after September 11. At worst, it will be a severe recession like in the financial crisis in 2008. I can’t say anything definite yet. ” Fed’s Interventions The Fed has provided trillions of dollars of liquidity to the economy over the past few weeks and has made an emergency cut in interest rates. During this process, the Trump administration started preparing trillions of dollars of incentive plans to save the economy. Minneapolis Fed President Kashkari says the economy has been hit hard by the Kovid-19 and millions of citizens may remain unemployed. This is why the Fed has taken radical steps recently, according to Kashkari’s comments: “This week, we saw an intense stress especially in the treasury bonds and mortgage-backed securities markets. That’s why the Fed acted aggressively to bring liquidity to the market as soon as possible. ” Kashkari actually summarized the Fed’s recent steps in a very simple way: Injecting as much money as possible. Scott Pelley asked Kashkari whether the Fed’s recent policies could be interpreted as ‘pumping as much money as possible on the market’. Kashkari stated that this comment would be correct and that the Fed could “keep it forever”. Unlimited Money With the coronavirus panic all over the world, people began to shop in stocks and withdraw cash to use in any emergency. Speaking to people trying to go to the ATM and withdraw money because of the coronavirus, Kashkari said: “You don’t have to do this. Your ATMs are very safe. Your banks are safe, too. There is enough cash in the financial system. There is an unlimited amount of cash in the Central Bank. We will do whatever it takes to keep the amount of cash in the banking system at a sufficient level. ”
