How the Fed will respond to the COVID-19 recession in an era of low rates and low inflation

The Federal Reserve responded quickly and aggressively to the threat posed to the United States by the COVID-19 pandemic and subsequent lockdowns. It cut interest rates nearly to zero, bought hundreds of billions in Treasury Department debt and mortgage-backed securities, turned all the pages of the 2008 playbook and added more – including a series of lending facilities targeted at mid-sized and large businesses, non-profits, and state and local governments. Now the Fed must decide how to support an economy still suffering from COVID-19 as fiscal policymakers are paralyzed. At the same time, it is undertaking a review of its monetary policy framework in light of an economy marked by below-target inflation and persistently low interest rates. 

On September 1, the Hutchins Center on Fiscal & Monetary Policy will host Federal Reserve Governor Lael Brainard to talk about the outlook for the economy and monetary policy, as well as the Fed’s new framework. Brainard has been a member of the Fed’s Board of Governors since June 2014. Following her remarks and a question and answer period, we will convene a panel to talk about the outlook for the economic and monetary policy as well as the Fed’s framework review with former Federal Reserve chairs Ben Bernanke and Janet Yellen, both distinguished fellows in residence at Brookings, Julia Coronado of Macropolicy Perspectives, and Robert Perli of Cornerstone Macro. 

Viewers can submit questions to events@brookings.edu or on Twitter using #COVID19Economy.