The Fed and COVID-19: What Is It Doing? Is It Working? What Are the Risks?

Professor Frederic Mishkin and Patricia C. Mosser, Director of the MPA Program in Economic Policy Management at Columbia University’s School of International and Public Affairs, analyze the Federal Reserve’s efforts to bolster the economy during the coronavirus pandemic in a discussion moderated by Kate Davidson of the Wall Street Journal.

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On March 11, the World Health Organization declared the COVID-19 outbreak a global pandemic.  Four days later, the Federal Reserve held its first meeting to address the consequences of the coronavirus on the economy.

Frederic Mishkin, the Alfred Lerner Professor of Bank and Financial Institutions, partly attributes the speed with which the Fed reacted to the pandemic to lessons learned from the 2007 financial crisis.

“The 2007 financial crisis was a dress rehearsal for the actions the Fed took in March,” Mishkin said.

Mishkin, who served on the Board of Governors of the Federal Reserve from 2006 to 2008, analyzed the impact of the Fed’s emergency lending programs on the economy in a panel discussion with Patricia Mosser, the Director of the MPA Program in Economic Policy Management at the Columbia University School of International and Public Affairs.

Mosser, a former head of research at the Department of the Treasury, called the Fed’s actions “extraordinary.”

“They announced more programs in six weeks than they did during the entire financial crisis,” Mosser said.

Mosser emphasized the importance of the Fed’s stabilization efforts, such as its increase in asset purchases, its role as the lender of last resort to the financial system, and new credit programs that directly lend to non-financial firms.

The talk, moderated by Kate Davidson of the Wall Street Journal, also included Mishkin and Mosser’s views on the risks involved in the Fed’s programs and the effect of public health decisions on future policy.

About the researcher

Frederic Mishkin

Frederic S. Mishkin is the Alfred Lerner Professor of Banking and Financial Institutions at the Graduate School of Business, Columbia University. He is also...

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