Bernanke, Yellen to testify on federal response to coronavirus recession

Former Federal Reserve Chairs Ben Bernanke and Janet Yellen will testify before lawmakers on the federal government’s response to the coronavirus-driven economic downturn, a House subcommittee announced Tuesday.

Bernanke and Yellen will share their views about the unprecedented federal efforts to stabilize and protect the economy during a remote hearing held Friday by the House Oversight and Reform Committee’s special subcommittee on the coronavirus pandemic.

The hearing will be the first appearances before a congressional committee for each of the former Fed chiefs since leaving the central bank, according to the panel. 

Bernanke chaired the Fed from 2006 to 2014 and was succeeded by Yellen, who chaired the bank from 2014 to 2018. Both are now fellows at the Brookings Institution, a nonpartisan think tank.

“The hearing will examine the federal government’s economic recovery efforts in response to the coronavirus crisis, how the crisis has exacerbated inequality, and the need for further congressional action,” the subcommittee announced Tuesday.

“Chairs Bernanke and Yellen steered the Fed through the 2008 financial crisis and its aftermath and will use that unique historical perspective to make recommendations for action.”

The Fed under Chairman Jerome Powell, who succeeded Yellen in 2018, has deployed trillions of dollars in emergency loans and asset purchases since the start of the coronavirus recession and financial panic in March. 

The Fed has been widely praised by former officials and economists, including Bernanke and Yellen, for its swift and massive response to the crisis. Fed experts have credited Powell with successfully building off of the emergency playbook deployed by the Bernanke Fed during the depths of the 2007-08 financial crisis.

Even so, lawmakers and policy analysts have expressed concerns that the Fed’s emergency efforts could be unwittingly increasing income inequality by providing ample support for stock prices and corporate bonds while struggling to reach average Americans.

Bernanke and Yellen have also echoed Powell’s calls for greater fiscal stimulus, including additional support to cash-strapped state and local governments.