welcome to cnbc. we continue with breaking news coverage of the pandemic right now. good morning welcome to "squawk box" on cnbc. i'm becky quick along with andrew ross sorkin and joe kernen if you are watching the futures this morning, they are higher even after those gains you'll see the u.s. equity market is indicating that dow would open up by 625, s&p indicated up 40 and nasdaq up another 130 points yesterday was the best percentage day we've seen for the dow since 1933 it was a gain of 11% if it closed higher today, that would be the first day we have seen a two-day winning streak

since february 5 and 6 that's right, it has been about a month and a half since february 5 and 6 for the dow and february 13 for the s&p 500. right now, it looks like the yield is at 0.858% andrew we have a huge lineup of guests today out of washington james bullard talking about headlines. tom barrack and former federal chairman ben bernanke. living through the crisis of 2008 and studying the great depression all of that coming up over the next three hours to the news that broke overnight. the white house and the senate

announcing a deal. we'll get to leasteve liesman f more on that and eamon with more. >> it was in the 1:00 a.m. hour that it broke overnight. what we have here, joe, is a handshake deal we don't have a vote and we don't have the explicit text what we have is a deal here is how mitch mcconnell announced the deal at 1:00 a.m >> help is on the way. the american people are already rising to this great challenge the senate is about to follow suit we'll pass this legislation later today. >> so here is what we expect is going to be in there again, we don't have the final text yet but what we are told, it is a massive $2 trillion

deal the center is direct payments to americans across the country that will be $1,200 for people making up to $75,000 it gets phased out around $125,000 in income $2,400 for couples making $150,000 and $500 for each child. $100 billion for hospitals, $350 billion for small businesses, $500 billion for corporations. for small businesses for those who don't fire anybody in this to pass it on the floor, the question is how quickly this could hit americans' paychecks >> thank you

we want to bring in steve lea liesman for more on the economic impact of the deal >> good morning. i want to talk about one component eamon just talked about. that last bullet point that talked about $500 billion to corporations he said the center piece is the aid to people. by the time that fed gets done with the $500 billion, that could be the centerpiece >> i want to mention the treasuries exchange fund will be replenished. that is important because that opens the door for federal reserve fire power to deal in a broad based way throughout the economy. >> we are talking about a couple of things here

first, it has never happened in the history of banking what is about to happen here second, $400 billion becoming $425 billion these are some of the things bernanke will have to deal with. how does the federal reserve lend to a nail salon, pizza restaurant or small rural manufacturer how does a central bank become a commercial bank? who makes these approvals? let's talk about how $425 billion becomes $4 trillion in potential lending. the exchange fund which the treasury secretary deals with. this esf provides the backstop or the losses of what will probably be a new federal

reserve entity commercial banks will probably provide some loans to small businesses the federal entity will provide these loans. it could be a few weeks before these are up and running 5.5 billion small businesses in america. how do you get loans to 5.5 small businesses no one has quite figured it out yet. all of this has to do with, you asked me about the economic impact when does it arrive? how is it used >> i don't think there is any amount of money that puts the fall outback in the bottle here. you can alleviate but you can't

get it back. >> is there a part of it that you would have local banks that are loaning to small businesses in the town? that and potentially state grants, local grants i can't see how that is done >> you are right, becky. you have to think about ways that you funl the whole process towards a more manageable number there is something like 7,500 banks. i'm assuming that on part of lawmakers here, that every small business has a bank account and somehow that can be used to provide loans. there will have to be protection for the fed. you can imagine if the bank

brings a loan of $100 that the fed can loan against that. remember the fed by law cannot take losses. that doesn't even mention the idea of the fed's independence and how the fed will be involved in really a whole fiscal program. remember back in the crisis of 2008, there was concern about the fed even buying mortgages, now it is going to loan to nail salons >> the other question, some people look at this as a liquidity crisis especially if this is a short-term situation, if you are a believer that we are back in business in a month or two some believe that is an aggressive situation some believe banks will lower

their standards for these loans. one of the things i think you'll start hearing is that financial companies like square will have more access to the day to day of the business because of the systems you have in place. they can see what is going on inside these businesses that they would be able to extend loans more quickly than a typical bank might given a relationship what do you make of that >> i think it is a good point, an interesting point if you have the ability to do this, my hat is off to you we have the small business administration while they do some very good work the sba is not set up to provide money quickly. it may be one of those things where it will have to look the other way at whatever the

fallout. there is almost certainly going to be abuse in this business it did more good than harm, let's look the other way i don't get it i know the fed is working on it. i got two different messages from the fed that we heard very soon and then we heard weeks for this to happen i know powell and the treasury secretary are talking often. i know the fed chair is also talking with congress through this they know the thing has been coming they've been doing a lot of other things like whandiexpandio corporate bonds. those are new programs too if they had the bandwidth, my guess is that they've been working on it. listen, there is something about this that is worth talking about. when does it arrive?

when do you want it to arrive? it may be one of those things that the federal bureaucracy works in our favor there may be a sweet spot beyond the closure whether it is better to get their money there people don't pay their bills toer a little while. it could be a one or two month delay that could work in the economy's favor. >> the two other questions i have for you if you are running a small business today, because they know these loans are coming, whether they will be more for giving, if you will over, giving people a 30-day grace period as people set these things up i heard about an rfp going out from the sba for call centers so they could handle 30,000 calls a day and looking to hire loan

officers there is clearly movement afoot to get this going even before the program is here. >> right and i might get a call from the sba when i get done with this. maybe they can get up and ramp this up quickly. yes. the federal reserve has already given guidance to commercial banks that you can restructure those loans. take that to the fed's window. the fed will finance that loan already a main street program out there. that will happen piece by piece, bank by bank, loan by loan people disparage the crisis of 08-09 for lending. but how do you do it even if it is a quarter of that

$5.5 billion it hasn't been figured out yet >> okay. talk about the markets for a second we've thrown a lot at it steve, the word for the fed on 60 minutes we didn't mention it at the time this was the word, to infinity and beyond they don't realize that. they really do have the ability. that's what we are seeing. we'll see what happens for me having a 22% gain, most people think the backdrop of the

coronavirus pandemic will cause the market to be volatile and sell off again it gives us 2,300 points of cushion before we make new lows. maybe we can absorb some bad news i haven't blocked everyone on twitter. did you see this it is ironic that this deal that it was a handshake deal. ironic it should have been, maybe a fist bump deal or elbow deal. >> you know me, i don't do handshake deals. >> you've been right about that. >> i've never worried about it hugs and everything. what are we doing? these people are walking germ factories? >> you've finally come around,

joe. >> this six-foot thing >> now you agree with me, i may have to rethink my standards >> this 6 foot thing, except for my family, i may institute this permanently. why do you need to get closer? >> today, it is going to be an important day for a lot of reasons. i'm in new york city this is the epicenter. you got out of here. >> you saw what they said in the white house briefing, anybody who has been in new york city has to go home and self-quarantine. what does that mean for you? >> i have a dhs letter that i'm an essential communication

employee i haven't seen a person here i have a robotic camera. the only person here i do my own makeup i stay home all day out there, so i think i'm complying, right >> boy in the bubble >> yes i dive into my car i was talking to my driver today, are you picking other people up throughout the day >> no. no there is no business, either, which is crazy >> i said are you wiping this thing down he said after you, i'm wiping it down >> smart man >> bullard and brian cornell from target. i saw you were going to interview bernanke

looking forward to that, andrew. okay a lot more coming up on "squawk box. more on the relief package coming from washington we'll hear from former fed chairman ben bernanke in the 8:00 hour. tonight, you don't want to miss this a town hall on the pandemic and the look ahead special guests include former white house advisor gary cohen and mark cuban send in yourueio qstns and responses to #cnbcpathforward. tomorrow.

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welcome back stock futures are positive after they reached a deal in washington on the stimulus package. producing the best day for the dow since 1933 400 points is not that good. we've been up double that. big market swings. every day feels like a week with the news we have the news yesterday was anticipating this deal

we should look at it as half full that we are up at all this morning. >> yes anticipating the deal and acknowledging the move by the fed but also acknowledging how outstretched the sffed is all these things, i think, did lead up to the size and springiness of yesterday's bounce i think when you look at the character of the rally yesterday, you can plausibly say it checked off a lot of the boxes you wanted to see in terms of the volume response and things you wanted to see the historic gains you wanted to see has happened which is not necessarily creating the historic low we could probably go up another 12%. looking at the two-year s&p from here that history is important in

terms of the dynamics and psychology creating a solid bottom we don't know if the market is sniffing out something or responding to the technical conditions of the fed in the worse-case scenario. >> japan has pointed out as we have seen in the last three or four days. i don't know when sentiment works and when it doesn't. a lot of smart people. i haven't seen a single day. it is easier to say, no. it is not over yet i have that same inclination to say that with a backdrop as scarey as it is, you can't possibly know the future

to say the lows are in, you'd have to be nuts. no one is saying that. all the smart people are saying no, no, no >> that's right. you want to be open minded about it we did not retest the lows we keep talking about 2008 what they didn't have in 2008 is what everybody remembers and thinks is the model for today. i do think the speed of the response in both markets and in terms of fed and fiscal stimulus is probably something a little different. that failed rally in 2008 was because tarp didn't seem to be enough. >> it was almost more of a decaying of the economy that happened you have sto be open minded abou it in both directions. >> i don't hear andrew

he lost his mic? okay let's bring in barry and stephanie link, a cnbc contributor. what do you make of the point that the consensus right now that no one believes i can't believe it either that it would be that simple. how about you? >> that's all very logical i'm sympathetic about some of the comments jim cramer made last night when it comes to the fixed income market. what we talked about last week was that the mortgage market needed to clear. we have seen all this evidence of mortgage wreaths being

liquidated i think the fed is gaining traction undoubtedly because of the market being confirmed the fixed income looks like it is starting to faed. that information is going up that is a plus we are in the vicinity of making a low. every recession since world war ii we shouldn't go farther on 2,150 on the s&p unlesses this an opec

embargo. otherwise, we've done the amount of damage that we should do given the pending recession that should be fairly quick >> i can go to stephanie and we don't even need to talk about the overall market i bet if we could find individual issues that have compelling reasons to start acquiring them right now whether it is the ultimate lows or not >> i would echo what barry is saying in terms of how underappreciated and how tight the bond got that's what we

really needy want to do a barbell and some offensive those recovery names are the ones that got hit hard i think as china recovers and stabilizes i want to own microsoft, they own skype, which we are all using right now. the free cash flow is enormous the only problem is that it is only down 12%. i'm almost rooting for it to go down more. bristol meyers

wells fargo is now yielding 7% the ceo and ex ceo are both buying stock it is down to stop the buy back they've got a new coo and there is a lot they can do in terms of the cost efficiencies. i want to barbell it with defensive and sick call. >> i like the background there

thank you both, becky. >> we are still awaiting details on what we can expect from the bailout package when it comes to airlines looking at the big winners yesterday with the dow and s&p 500. "squawk box" will be right back.

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good morning welcome back to "squawk box. we have breaking news out from target talking about the impact it has been seeing from the coronavirus in its stores. they are seeing a huge surge in traffic. the ceo of target talking abou changes and plans they have at this point they need to focus on the business at hand making sure they have enough stock and supply getting to their stores they'll change the number of remodelling and stores opening at this point, they'll probably have 130 for remodels instead of 300. they are also talking about new small-format stores. it takes away from the efforts that they are facing in terms of trying to make sure they have plenty of items to stock self-s. talking about what they are doing for associates

they are raising pay for associates by $2 an hour until may 2nd. giving access to paid leave to team members who are 65 and older, pregnant or have underlying illnesses and giving bonuses to front-line workers and bonuses. there is a lot here to make sure stores stay clean too. we'll have brian cornell with us to talk about what they are seeing, what surges they are seeing in traffic and the impact for guidance on wall street. all of that coming up. but that is the breaking news coming out of target right now andrew thank you, becky in the meantime. i want to get an update on airlines as we await word on what kind of bailout they can look forward to from washington.

phil, good morning >> good morning. one of the things expected to be in the final language of this senate bill that has been approved is that the airlines will be getting $50 billion through direct grants and some loans will require that they not layoff or furlough any employee. with that in mind, get ready for what we are expected to see. they are going to make cutbacks and services in terms of how employees won't be furloughed, will have their time cut back or pay cut back delta announced to the staff that they are going to go to three and four-day workweeks, ground employees and that's another 17,000 that have said, look, i'll take a voluntary leave of absence

those ground employees will do this over the next 90 days here is the reason why look at passenger traffic. there is very little revenue coming in to airlines right now. sclekted to lose $350 billion. the other thing airlines are doing, american airlines will cut in-flight services what does that mean? the one that will get a lot of attention is the fact that in the main cabin, they are not doing alcohol sales. if it is a flight that has very few people, they'll space passengers out and move you around so you are not next to somebody else. here are the airline stocks this morning. it moved up 20 to 25%.

one last note on boeing. they will restart its 737 max a s s assembly line in may they are reramping it. it will take them a few months to get the production line up and running to get to full production somewhere in the third or fourth quarter. >> i saw that delta wasdo downgraded to junk on the s&p. >> you can expect airlines at some point will have to go back to the credit market so clearly, that will impact the terms of their borrowing in the

future delta is widely believed to have the strongest balance sheet and you are cutting them down to junk status? expect to see more of these types of moves from the credit rating agencies over the next few days >> okay, phil. thank you, sir we'll see you in a little bit. i want to bring into the conversation, former american airlines ceo bob crandall. what do you think about the balance sheets of these airlines with the bailouts? assume the bailouts are in place. will they have to go back to the credit market or the government? >> caller: i think this

downgrading to delta as junk is sort of a heads up of what is going to happen. the airlines had to get bailed out after 9/11 now they are saying we are an essential utility. i agree. we have to have an airline system i'm not at all sure either long-term loans or grants and i'm not sure what is included in the senate bill. i'm not sure either of them is sufficient the airlines are a utility it is obvious that these he kind of black swan events are always going to have a strtremendous ad adverse affect on the airlines it seems that the government and the airline industry in exchange for which will be some

constrain. you know about the publicity in the last five or six years, the airline industry has spent more than the free cash flow buying back stock that doesn't make any sense. in a business that could be as adversary affected as the airlines have been affected. i think the airlines will have to go back to the credit markets. they may very well have to go back to the government we may collectively have to think differently about the airline industry, which is, in my view, something of a transportation utility it may need to be constrained and/or regulated along the lines of the utility it isn't like any other business it has a unique role in america. >> bob, you know all the discussions we've had about stake holders and es garcg and s

other companies are doing? do you think this will drive things delta was a drive to get $1 trillion to go carbon neutral. in a crisis like this, a lot of other things you can do when you are profit, then things get hard like this and you wonder was that a great move to make to feel good about what you are doing, i guess >> joe, as you know because you are talking about them all the time we have a variety of huge issues in the united states issue in terms of income and inequality, issues of climate change at the moment, we have this issue about the coronavirus and sustaining our utilities >> the answer, sure.

this carbon neutrality issue may be well off the table for the next four or five years. we've got to settle for the long term how are we going to provide transportation for the united states i think over the next couple of years, people are going to have to sit down and think carefully whether we'll be in a situation to bail the industry out every five years >> bob, to hear an insider like yourself say that the airlines would be affected like this. in terms of thinking about this much more as utilities, how would you structure that and, by the way, if you are right, bob, you have to imagine that shareholders would be wiped out or injured

this stock has huge valuations. >> caller: that's true i'm not sure you have to wipe out existing shareholders or valuations i wouldn't use the term nationalization. it may be essential to have some kind of underlying line of credit, quote/unquote with the government >> i think what dave calhoun was saying yesterday was that you would almost have to regulate them like banks. right? >> yes i think there would be requirements for example, i think you'd have to give up the notion of buying back shares and accept some limitation of executive compensation, the extent to which airlines can abandon in some city which you now serve.

whether you can send maintenance work abroad. a whole variety of things. the industry will have to live with some constraints. that trade off may be in the best long-term interest of the country. >> bob, we'll leave it there thank you. we got some news from the uk this morning prince charles has tested positive for the coronavirus saying he's displaying mild symptoms but otherwise remains in good health he is of course, the heir to the british thrown we'll be back after a quick break. tonight, don't miss the cnbc town hall on the pandemic and a look at the future of companies,

workers, investors and health care special guests include gary cohen and mark cuban send in your questions to #cnbcpathforward.

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briefly negative and turned positive they are just up barely 11 points now on the dow. the s&p and the nasdaq are both in the red now becky. joe, thank you brian cornell is the ceo of target the company is how with what it is seeing with unusually high traffic. the stores making a number of changes. withdrawing its prior guidance will be suspending purchase activity and giving raises of $2 an hour for employees working through at least may 2, also giving bonuses to store associates for the first time. brian cornell is on the phone

with us. >> caller: good morning. i hope you are at home and staying safe and healthy >> i am. i hope you are too let's talk about what you are seeing, brian. you have never seen anything like this, have you? >> caller: we talked to our investors on march 3 at that point, we talked about our outlook for the quarter and the year as you know, things have changed dramatically during that time period we thought it best to update investors today, trends and changes we are making to our team and focuses on serving our guests obviously, we've seen a surge in business in february, we saw our comps increase by 3.8% pretty much in line with our expectation. in march, we started to see our business surge our comps are up 20%

in certain categories like household essentials and food and beverages, that has grown like 50% year on year. i'm proud of the work our teams are doing, our team members are the on the front line providing a community service as our guests look for those essential items, for medicines, diaper, all those core items that their family needs right now and we thought we needed to make sure we're investing behind our team. we did announce a $300 million investment in our team, higher wages, $2 across the board for our supply chain and store team members. bonuses for the first time for our 20,000 front line leaders who manage the individual areas in our stores. we're providing all team members who are pregnant, 65 or older, have pre-existing conditions, 30 days of paid leave and we think it's really

important right now to provide free back up child and elder care as, obviously, so many of our team members have children that are in their home and no longer going to school >> so, brian, let's talk about what you've seen you've seen 50% increases in some things you're selling to customers, how do you keep up with that. how is the supply chain working right now and how able are you to get things resupplied on the shelves? >> we're working in tan gem with our key vendors. we've seen an enormous surge in paper products, in disinfectants, in canned products, in beverages and we started to see that, becky, occur in that last week of february. as consumers started to recognize that the world around them was changing.

as your honor n irc universitied buy what you need not for the next ten weeks we had to put limitations on certain items to ensure everyone has access to the key essential items that they need but we're working very closely with our domestic vendor partners to make sure we're replenishing our system, flying in goods and make sure we can replenish and provide the products that are so essential to american consumers today. >> you know, brian, i was in target on monday and i was pleasely surprised with what i was able to get. paper towels, diapers, wipes, m&ms, all the things you need for something like this. but are there problems -- i couldn't find toilet paper

that was one thing that was not there. >> those products are flowing through our system today, again in tandem with our vendors we're working around the clock to make sure we can get product back on the shelves and make sure the next time you're in our stores all of those essential items you're looking for are available or if you choose to one of our convenient same day services, you can order and pick up, drive up into our parking lot, we'll put it in your trunk and we have, obviously, hundreds of thousands of personal shoppers that are bringing product the to your home but as opposed to coming in your home they are dropping it at your door step. we're making sure we link our supply chain with the products you need to make it as easy as possible for you to replentyish t the things in your home. >> we had a local supermarket chain operator saying the supply chain, the bottleneck, whatever, has been alleviated and it's

gone i wonder the inclination to hoard, that everyone had because of what's happened was the whole notion like coronavirus could shut down trucking or supply chains or people work in the distribution centers, was that overblown, do you think? was there ever a chance you needed to hoard pasta and food because that meant the supermarkets wouldn't be restock in your view >> he joe, i think it was really important we clarify that certain retailers were going to provide these essential services and stay open. that's been one of our messages. we're committed to serving all of those millions of families that shop our stores every week. he we are going to stay home we're going to support our teams to make sure they can support our guests there was some question will all of retail close. if we sit here today in the united states, over 110 retailers have closed their doors. that represents 36,000 retail

doors across the country that are no longer operating. i think there was some question around, all right who else will stay open and how do i get those essential items. so, we try to make sure thesume and our guests know we're committed to operate our stores, to provide them with the product they need, to work with our suppliers and vendors to make sure we have product in our stores and system that they can shop each and every day. there was some confusion will all of arrest close and if that happens how do we get that core essential items i need to take care of my family each and every week >> brian, i want to just ask you a couple of things first of all, thank you and thank you to the people in the front line i filled out a card. i touched the pen. i filled it out to thank everybody and i immediately sanitized. my question to you the $2 that are going to be added, per hour to your workers do you believe that's going to be sustainable

across the board the 50% increase, you look at that as one time do you look at that as two or three months what does that look to you or how do you model that out into the future we all hope we get over this hump and this virus. what's the thought process there? >> it's why we decided today to withdraw our guidance. the range of outcomes are just so wide. it's hard to provide any kind of precision in this environment. none of us know how long this virus will last. we don't know when america will go back to work. obviously, great to wake up this morning and see stiimulus package has been approved but we don't know all the details so it's hard for us to say how long will this go on we have to be flexible and adaptable. i meet with my leadership every single day we're constantly making adjustments because there's no lay book for this environment and i don't expect 50% in

certain categories to go on forever but we don't know if that will continue for four weeks, eight weeks or 24 weeks so we got to be flexible and adaptable and literally we're making adjustments and decisions every day as we try to cope with the challenges in the system >> brian, walmart has said they are hiring 150,000 additional people to kind of help them out with this. amazon is looking for 100,000 employees. your hiring too? >> we're hiring but starting with adding additional hours for existing team members to make sure our existing team has access to those hours. we're moving up our drive up service. we're certainly hiring in many of our stores. in fact about 50% of our stores are hiring right now we're hiring in the supply chain. but we only start by taking care of our existing team and make being sure they are getting the

hours that they want and they need to support their families >> brian, i want to thank you very much for your time this morning, and appreciate all the efforts that you and your employees are putting in thank you for joining us today >> i really appreciate the recognition of our team. the real heroes are the team members who are in stores every day providing a service that families that shop target need each and every day so thank you very much >> absolutely. we go in and worry about the one person at the cash register. meanwhile the person running that is like seeing 1,000 people just think of that they are heroes. they are coming up much more on the stimulus deal in washington. senator chris coombs will join us next. futures turned negative. down 76 points s&p down 25. nasdaq down 70 we're coming right back. it's a challenging market.

edward jones is well aware of that. which is why we're ready to listen. and ready to help you find opportunity. so. let's talk. edward jones. it's time for investing to feel individual. should they downsize? nesters now.

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futures swinging, well off their highs of the morning and president trump says the u.s. could open for business by easter some argue it's too soon as pandemic numbers continue to rise the latest on flattening the curve and the spread of the coronavirus as cnbc special coverage of the outbreak and the markets continues right now. good morning, everyone welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. watching the futures this morning and for a while we thought maybe, just maybe we might see two days in a row of gains. not the case right now take a look what's been happening with futures yesterday was the best day that the dow has seen in 87 years best day we've seen since 1933 yet the dow was up by 11.3%. this morning we had indicated higher earlier we were talking about the dow up

by 600 points at 6:00 a.m. but it has withered away some of those gains. right now it's down by nine points futures are down as well they are down by 22 points looks like the nasdaq will be down by 51 points if it opens up here the market doesn't open for another two and a half hours we'll see where things are going. already we've seen a gain, a swing of more than 150 point in these futures this morning let's take a look what's been happening at the treasury market 10 year was yielding .823% on the ten year guys i'll send it over to you. >> thanks, becky the white house and the senate reaching a deal on a $2 trillion coronavirus stimulus bill. eamon javers joins us with more. there must have been a lot of time-outs. they were on the 2 yard line for two hours or something was that not the longest goal

line stand were the democrats making a goal line stand who was on defense and who was on offense >> reporter: it's hard to know every reporter in washington was trying to figure this out yesterday as they came out in the morning and said we're really close, we're almost there, we're inches, yards away, using referee sports metaphor. the entire passed. we didn't get an nuchlt a deal until 1:00 a.m. last night what we don't have right now is we don't have a vote we don't have the text so we don't know exactly what's in this deal what we do know is what we expect to be in the deal let me walk you through that politically the centerpiece is direct payments to americans that's ultimately checks for $1,200 for people making up to $75,000 a year tails off between 75,000 and 100,000 and we believe over 100,000 income people won't get

anything $2400 for couples making up to $150,000 huge chunks of aid from federal government $100 billion in assistance for hospitals. $350 billion for small business. i'm told that might be able to go much, much higher depending on how many small businesses apply for aid there. those loans could be forgive enentirely if the small businesses don't lay anybody off. $500 billion in aid for corporations across the board. a lot of federal help is coming. mitch mcconnell saying he felt this announcement was going to be good for the country. here's what he said at about 1:00 this morning. >> it will rush financial assistance to americans through direct checks to households, from the middle class on down and through a significant and creative expansion of unemployment insurance during this emergency it will deliver historic relief

to main street america through hundred of billions of dollars in emergency loans so more small businesses can survive this, and keep paying their workers. >> reporter: now a lot of provisions in there. we still don't know about. chuck schumer in his letter to democrats last night told them that one of the provisions in there will actually prevent any businesses controlled by the president, the vice president, members of congress or heads of executive branch agencies from getting federal aid from the treasury we'll have to wait and see how that one plays out that's interesting particularly that the president has been focused on the question of mar-a-lago and his hotel and tourism business the president refused to rule out earlier in the week taking any federal aid for his businesses saying that he didn't get credit for giving up his salary so he won't promise necessarily not to do this time around congress may have blocked him from that. we'll see what the letter of the law is because definition of

control is hugely important. >> tough one it probably has been tough when half the country would not stay in one of those countries no matter what at this point. anyway he's been dealing with them let's bring in -- i'm excited to may have senator chris coombs. he's the lead democratic appropriator on if small by committee. you've been on a lot senator i remember back to some of the previous fights we had in washington like the kavanaugh fight how reasonable -- you're one of the guys i always thought both sides could talk to and, you know, not just immediately, you know just want to strangle the person on the other side half the time, right i guess that's a compliment somehow to you senator >> is that compliment, i appreciate it. i'm excited to be joining you this morning now that we finally have bill text, we have a he deal, we have not just the broad outlines but a lot of detail and

i'm very hopeful that the senate will take it up and pass it "early today" with a big and bipartisan margin. and i am hopeful that the house rather than reconvening, rather than trying revise or amend it will pass it by unanimous consent so this record relief package can get out to the american people. you describe it -- it was described briefly there in the opening in broad terms let me add just a few things about what it was that held this deal up for two more days. i spent ten years helping run a county government. there was very little for states and counties a few days ago. there's now $150 billion in direct assistance. most of the folks, we are admiring and lauding the paramedics and the hospital nurse and orderlies, many of them in this country work for county hospitals lots of our states because of the near collapse in sales tax revenue and the delay of the federal income tax date state

and county revenues are dropping dramatically and contingent them to carry a lot of burden so that $150 billion was important. expansion of unemployment insurance from three months to four months and additional $600 a week makes this a robust unemployment insurance benefit there's $100 billion in here for hospitals and health systems that i think will help them carry the burden of this response to the pandemic and last in some ways most importantly some transparency and accountability around the $500 billion that will be used to keep afloat he some of our largest corporations there's now going to be an inspector general and oversight board and some limitations, most importantly allowing those deals to be transparent so that the public knows who gets what loans or grants and on what terms. >> senator, on a good day the way sausage is made in washington can really upset a lot of people, then you got a

real crisis and watching business as usual and both sides do it, i understand that but do you think that your side eventually took the pulse of the country when we were talking about emission towards for airlines, when you're talking about planned parenthood when speaker pelosi got back suddenly there was a lot of things being talked about that no one had any idea were going to be in this bill i know you'll say it's a slush fund and that's your story you'll stick to it and everyone else do you think democrats finally said you know what i think people are realizing this is unacceptable what we're trying to stick in here we better get this done. >> two things. i had a provision that i was fighting very hard for in this bill, senator wyden, senator amy klobuchar and i have a bill to provide for a vote by mail i can make an argument why nine

states have delayed their presidential primaries because of this pandemic, and we ought to have a provision that requires all states to have an emergency plan for vote by mail. we could vote our front line troops voted in the second world war, there's no reason we ought to kill elections or defer alexandrias for this pandemic. i fought awfully hard for it i got told a day, day and a half ago if we get this thing passed everybody needs to take a step back and take the thing they think is absolutely critical and let's focus on what we have to do right now after -- i got to a point to answer your question -- where i started to say to my colleagues i respect that you think that airline fuel efficiency standards is the most important thing for right now or that you believe that student debt relief is the most important thing for right now. we need to take things that have to get done tomorrow and focus on that in this bill and i think that there were a

lot of provisions we could talk about that republicans and democrats added to or tried to add to this bill what we're passing directly responds to this crisis. let me talk for one minute if i could about the $350 in sba lending. it defierce payments on any interest or principle for six months takes them off the short term. that $350 billion up to $10 million per nonprofit or for profit with a specific incentive. it becomes a grant if you use it to pay your payroll, but you can also include some rent, mortgage, utility. getting this out is going to be a real challenge i'm already communicating with my republican and democratic colleagues on the small business committee about how do we implement this how do we support the sba, lenders all over the country these are no fee loans and

grants to the borrower there's a fee to the financial sector my hope to get this money up and out transparentally, quickly and either help re-open or help save literally millions of small businesses a lot of this was written with restaurants and hotels in mind but affect a very wide range of nonprofits and for profits all over the country >> when you say let's forget about this other stuff were people nodding no, you must have convinced them >> i'll put it this way. every one of us has something that we believe is critical. eventually everyone has to be persuaded to put their tools down and stop wtih the partisan tools and start with the tools of national purpose. it's the moment for us to focus on delivering, you know, personal protective equipment to hospitals and doctors and nurses, delivering test kits, restarting our economy, saving jobs there's millions of people who are desperate for this

assistance to your basic point, as we were waiting and waiting for the final deal points i was taking calls in the front office because there's very few people working here in the capital. i got an earful. it helped reinforce my sense we needed to get this done. the things that democrats stood firm for expanding unemployment, helping states and counties, investing in hospitals, transparency on the big fund it was worth a day wait. i'm excited about this package and excited to get it out the door >> great, senator. every other senator has been trying to get on this show and i said no. i saw chris coons is coming on, he's one we can talk to. anyway, thank you, senator appreciate your time this morning >> thank you very much >> thanks for convincing everyone, anything you did to help, we appreciate it thanks meantime the weekly mortgage applications numbers they are just out right now and i want to

get over to diana oleck who is in washington with the details diana. >> reporter: mortgage applications took a steep dive total volume down over 29% mortgage rates did move higher it rose from 3.74% to 3.82%. that's the highest since mid-january thanks to market volatility and lenders dealing with remost work challenges. that caused a 34% drop in refinance apps but they are volatile. they swing with rate moves what's troubling is mortgage applications to buy a home which are less sensitive they fell 15% since the lowest level of august of last year 11% lower annually first time they've been lower in over three months. purchase applicationswere down even more dramatically in the states hardest hit by the coronavirus. they fell 23% in california.

35% in new york and down 17% in washington state interest rates are now moving lower again but that's unlikely to have much impact on buyers. there's a big drop in demand as people worry about their jobs, income and the stock market. back to you. diana, thank you love that shot behind you. flowers coming out on the trees. it's beautiful >> it's spring >> good reminder diana oleck. when we come back we'll talk about target pulling its guidance for the full year because of the coronavirus we'll tell you what the ceo told us let's take a look at the futures this morning we had seen the futures up the dow futures up by 600 points when we started the show right now, though, they've come back down. flat line right now, down by 150 points but right now the dow will open up down by seven points nasdaq down by 56. s&p down by 27

this comes after the biggest day in 87 years for the dow yesterday when it was up by 11.3%. stick around "squawk box" will be right back. the barkins are empty nesters now.

should they downsize? probably. will they? not as long as thanksgiving is a holiday. planning for the future is about more than just money. let equitable be your guide.

good morning, everyone welcome back to "squawk box" target out with some news this

morning saying it's going to suspend its guidance for the quarter and full year and also withdrawing or suspending its share of buy back program. it outlined a number of other steps it's taking in its stores to handle the coronavirus outbreak and gave us an update in terms of what they are seeing here's what brian cornell told us less than an hour ago >> in march we started to see business surge and our comps during the month of march is up 20%. but in certain categories like household essentials and food beverage our business is growing at a rate of 50 pierce year-on-year so enormous demand in our system i'm proud of the work our team is doing >> take a look at target shares. they've been down a little bit this morning after news. the market has bounced all over the place. brian cornell last night on a call walked through how americans has been shopping through this the first thing they went to buy is disinfectants and groceries

then they loaded up on entertainment, games after that kitchen ware started to sell really well when people realized they would be cooking at home. then they said in terms of apparel you see people buying apparel but mostly leisure wear and pajamas. an encapsulation how person consumers have reacted to this crisis he said last night it's safe to say right now america is largely out of business. there's no playbook nor. none of us have seen this before reiterating what a lot of ceos have said in how they describe what's been happening here andrew, i'll send it over to you. >> the coronavirus stimulus bill would inject trillions into the economy and include checks for americans. joining us right now to talk about that and what he's seeing is mckenzie global managing partner. a month ago you had just been back from asia, if i'm right and

we were talking about the coronavirus, but i don't think we were talking about it in the context of it coming to the united states in the way it has. give us just a little bit of the lay of the land given all the conversations you're having with ceos seems to be a tale of two cities target on one hand health care providers who business is better than ever and so many others who are going to be left behind >> well, i think that's right. we're certainly seeing how differently this impacts different sectors. one thing is clear from all the conversations i've had you just heard it from brian cornell at target. this is a new normal for our client they are worried about three things first of all, they want to care for their employees, customers and cash it's in that order secondly they are worried about cash you mentioned the health care sector you would be surprised to hear there are providers in the health care sector, those not

getting paid and they are worried about cash flow like the other sectors. the third reality that we're dealing with people keep saying scenarios, how will this play out. you mentioned a month ago we were together and didn't talk about the scale and severity of what we've seen. the scenarios are helpful. we need to understand it the reality is what's going to be true across all these scenarios. what it we'll see. what's the next normal how will we operate? as you said at the top of the section reality is consumer behavior, and something else is changing and will it go back i think the answer in many cases is no. >> let's talk about that, this next norm jalg and when you say it won't go back what do you think will change? there's this sense that everybody will want to do zoom conference calls from now on i don't know there's part of me that wonders the personal connection after this is all over will be even

more highly valued >> we'll still have personal connect. but if you think what's happened in the last few years some of it will be reinforced the shift online which zoom and all the digital that goes with, that's been given a boost. hard to see that be taken back to where we were before. at the same time one of the biggest shifts is the way product reaches us for many years we and others included have been focused on efficiently. how efficiently can i run a supply chain now the conversation will be how resilient is my supplychain. the third piece is we had books written about the death of distance it didn't matter if things were far away from us now we understand what distance means. social distancing of course but things far away a lot can happen between here and there and businesses will bring a lot of stuff back to where they can control it you'll see some pretty fundamental shifts and that's

why i think target and others have been talking about we should forget what normal looks like what's coming next how will this change that's what our clients and we're very much focused on and that's the real change coming out of all of this >> in term of the immediate impact, you said the companies cared about their customers and employees first before you talked about cash. i have to say anecdotally i'm hearing a different story, especially if you're impacted industry cash has become king and if you don't think cash is coming in, you're seeing it where ceos are laying people off, reducing salaries and the like almost immediately i mean it's a little bit like we're going to ask questions -- we'll do it now and can questions later because we just have so much uncertainty how are you advising them in terms of the cost of laying people off now if there is a quick turn around. and how to even think about this

next month, two, three period, the president, obviously wants to get back to work on april 12th there's a number of health experts who are obviously on the other side of that >> well i do take issue with the initial point. i can promise you the ceos i spend a lot of time with are very much focused on their employees. you heard it with brian and others that said, of course -- >> kevin, hold on. that's true of a target where there's a huge business and dare i say business opportunity >> correct >> danny mocker, who i think is one of the most compassionate worker first people out there laid off 2,000 people almost immediately. and that's because he's in the restaurant business. >> of course i can't argue with the reality of what some are dealing with are so extraordinary they have to make decisions that fly

against what i said about caring their employees. i stand by this assertion for many, they are looking to a situation where one of the lessons we learned from countries ahead of us in terms of dealing with this not so easy to bring a business back if you don't have employees. they are very much going to take a view what is the path to this next normal how are we going to get there? that includes being very thoughtful in the way in which they can maintain what they have by way of employees. we're also seeing a lot of companies working very hard to figure out if our business isn't busy another one is. people need distribution warehouses and logistics companies do need people i think the picture is a bit more nuanced than any sweeping statement i make or you make the reality is different in different sectors and people are trying to adjust >> kevin, real quick if we do move towards a

resilience economy, if maybe that's the next normal, that's a less profitable economy. because the just in time efficient economy clearly had efficiencies built into it that a resilient economy will avoid these booms and busts. on a quarter by quarter basis it won't look as attractive to investors. what do you tell ceos about that >> i think it will be different. we invest will be ifferent they will build in expectations about is this business resilient? how do we cope with the kind of shock we've just seen. let's hope this is truly a black swan event it changes the way people think about risk and change the way they value that rifrg. it will have a fundamental shift. i agree. investors will look at it differently and ceo are looking differently. that's why we're not going back to the normal we had before. >> kevin, we look forward to talking to you again about the next normal very soon.

please stay safe and healthy >> same to you thank you. >> joe, back to you. >> will you come back? i hope so. coming up, blackrock global cio rick rieder joins us to discuss the market and what's left in the fed's tool box to stimulate the economy. later an update on the outbreak in italy we'll talk about the parallels between the lockdown here and what we're seeing here in the united states. our breaking news coverage of the pandemic ctiesftonnu aer this quick break [ slow dance music plays ]

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at netsuite.com/boots. should they downsize? nesters now. probably. will they? not as long as thanksgiving is a holiday. planning for the future is about more than just money. let equitable be your guide.

a huge lineup of guests to come this morning including jim bolller, and ben bernanke. futures right now we'll show you where things stand we were positive a little bit earlier after a huge day yesterday. a lot could change in the next two hours before the opening ayll st tuned you're watching "squawk box" on cnbc free!

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for more information on how you can stay connected, visit xfinity.com/prepare. welcome back to cnbc let's take a look he at the futures this morning we've been watching. they have been all over the map this morning

when we started the show at 6:00 a.m. eastern time you were looking at the dow futures up by 600 points after coming off the huge gains yesterday of 11.3% for the dow. biggest one day gain you've seen since 1933 that's right, 1933 right now futures are giving back some of those gains dow futures right now indicated down by 160 points s&p are down by 42 and nasdaq off by 104 been watching all of this. been watching big dow gainers. boeing is leading the way after it looks like washington has finally has a deal, just needs to be signed that's helping out shares of boeing this morning and that's one of the big gainers guys, over to you. >> joining us now, rick rieder chief investment officer of global fixed income at blackrock. rick, i guess, where do we even start? i would have asked you about what we were seeing last week in the credit markets and i do want to hear what you have to say

about that, but then, i mean after what we heard from the fed in reaction to that there's just so much to talk about, that just go >> joe, like becky said. i'm not used to comparing things to 1933 but in thesemarkets that's what we're doing. every part of it is historic listen the fed, what they are doing is immense the fed sputting i don't know what bigger than a bazooka is. they are getting at like you said investment grade credit market that's starting to stabilize last couple of days had a good move high yield is still difficult. the mortgage market has stabilized off the run treasury market has stabilized the fed is getting out that's powerful. rest of the markets, people don't realize what's moving

these markets is not a lot of volumes. a lot of volume of trade but very small size. so this is pretty incredible stuff. credit market is investment grade is better but the yield market is tricky and it will follow what fed will do. the market is stabilizing and performing well is where the fed is going >> someone told me it was like -- trying to do something with a wet spaghetti noodle. i mean that's the negative, that's the half empty view of where the fed is and yesterday i realize that the "wall street journal" was making a pun, said something use the last arrow to stop the markets from quivering but implying that was it you know if there's a wild boar coming at the fed it's hand to hand combat they don't have any more arrows. do you buy that?

>> no. he was thoughtful when he described the deal and said the fed has unlimited bullets. the fed will win the fed has unlimited bullets particularly when inflation is running as low as it is. look at where the inflation markets were three or four days ago. the fed has stabilized that. the fed has unlimited bullet s ecb is in a tougher spot, bank of japan is in a tougher stuff so doing things in the municipal market although -- doing things within the credit markets, that's all pretty powerful stuff. i don't think people realize and people follow the stock market what are equities doing. you go back a few days ago the aaa assets were under incredible pressure across all markets.

people were trying to raise cash the until the fed came in aaa assets were under pressure you can't buy up until how you buy credit, assets until aaa assets stabilize that's where the fed got at it there's some indigestion that has to go on but that's still important. people under estimate that >> more and more bullets that was the word i mention ad few times. glad i watched "60 minutes," as hard as it is sometimes, rick. but i'm glad i did watch that and i felt more confident. why wouldn't you be recommending gold why isn't gold over $2,000 we used to worry about current deficits, remember we were talking about trump running them over a trillion dollars and how they could go to $2. now we won get any tax revenue or not nearly as much because

there's not any growth why isn't -- unnecessary you believe in mmt why isn't this a scary time in terms of what we're left with when it's all said and done? >> joe, i think your point is incredibly tough on that gold, you think what was happening a few days ago, up to all the hedges, the risk off assets a we call them, treasuries weren't work. people were raising cash by the way i think it's a pretty good asset to have today as part of a balanced portfolio. gold wasn't work treasuries weren't working think about what happened in the last two or three days treasuries are working equity selloff in the last couple of hours. treasuries are working by the way now gold is working why it didn't work a couple of days ago or last week is because people were using to it raise cash i think you're dead right. gold is going higher

and treasury will work again particularly when you have buying >> what about our children and grandchildren? that's what people are talking about. >> yeah. >> can we handle it? i hope we can. we have a great economy. rates will stay low. i don't think we've taken into account, believe it or not, i believe in the singularity to some extent these great strides mankind is making the time between each one is getting shorter and shorter and i don't think we can appreciate the internet or whatever comes next. so i'm hopeful we're running up a tab >> no, we definitely -- you got to put it in perspective people talk about this is the japanification of the u.s. i don't think that's right demographic curve is different we'll run up a big tab but you need to put a little bit in perspective. the fed's balance sheet will be

a little over 5 trillion that's about 23 or so percentage of gdp europe is much more than double that and japan i think four times that so we got some room. the fed has some room. listen, it's part of what this funding will be, for near term dynamics we're putting more debt on the system i don't believe in mmt there's a limit to how much you can do putting fiscal stimulus in today for the bridge from here to there has real efficacy behind it you got to do it and be careful. we just can't build the tab. we're in much better shape of the world. our innovation is better our energy dynamic is better but you got to be really careful about the amount of debt you're willing to put on the system should we put debt on now? but you got to pull it back. my sense is you get a chance to do that when you're on the other side of this

like you say mmt goes a step too far. >> if you're sitting out there as an investor, maybe has money, maybe would like to raise cash, what would you be doing right now? standing aside because we just don't know anything about the chronology of the pandemic the >> you have to be patient and think what is the long term. you got to run cash. with our fund we run a high level of cash. that's got to be part of it. listen i also think -- first of all you follow the fed, treasury, mortgages, investment grade. the fed will win they've big stick. then you got to look at these equities that are -- i mean people six months from now a year from now will look at free cash multiples around technology, communication, defense, health care, we're playing companies free cash multiples in the high

single digits. go back to world war ii you've never seen numbers like that those will come down think about maybe i'll nibble at some of this own some treasuries. own some gold, like you said i think it's the right thing if you miss this opportunity around some of these, look what happened yesterday, i think you want to buy some of these companies that will make it over the long term. >> all right, rick good to have you on. don't have a whole lot of guests that come in front craft at this point. >> thank you >> good to see you, actually >> you too >> speak to someone moving anyway, thanks >> thanks, joe >> coming up when we return an update on the pandemic in italy and what the curve there could mean for the lockdown here in america. that's next. then at the top of the hour simple fed president james bullard is our special guest and we'll also be talking to ben

bernanke

. welcome back to box this morning. we're watching the coronavirus pandemic that's happening in italy along with the rest of the world but specifically what's happening in italy and what it might be able to tell us about what could happen here claud

claudia. >> reporter: what could happen first of all what actually registered sort of a peak which is what we're trying figure out if it's happening or not after two big addition fatalities yesterday we saw fatalities decrease. there's something important to clarify about the numbers because definitely there could be something different one of the problems here is we're not testing enough this is because lombardy represent 60% of all case in italy is under the tsunami of caring for the sick and cannot test so widely thought that there are tens of thousands of positive people that have not been tested that are either home sick or without symptoms and still at home but without symptoms.

another important note death rate is very high but, again, because we have a high elderly population, 23% in italy are over 65. cultural habits yes. again the fact they are not testing and the fact that this larger number over on italy could definitely increase that denominator making the death rate a lot less. also remember the health care system here that's accessible to everyone because it's free also puts elderly people who have conditions to be able to take care of themselves so rather than not being here they are it sound strange but that's one of the other elements. as far as the measures are concerned we're definitely in full lockdown here and hoping that this will help reduce the virus and people are trying to abide by these rules >> claudia, what are people talking about in terms of a timeline the president, president trump of the united states has talked about trying to re-open the country fully, i think, maybe he's not talking about new york

or california, i don't know, but by easter. that's about three weeks from now. in terms of the timeline in italy what are people talking about, or are they >> it seems to be harder by the day to talk about a timeline we're talk about a timeline days ago and now it's harder to under. if you think you're two, three weeks behind us, until easter everything is shut down. that's official. then how you will get back on your feet? how will people start to go out and about? there are many things including if you can test for antibodies if you have people who you know had the virus, you can confirm that maybe you can start to get businesses going again the timeline will depend on what the government is able to put into place in order to guarantee safety and safe conditions for workers and for schools and for people that are out and about.

it's too early to tell yesterday there was a rumor running around about the 31st of july and the prime minister had to step up and say in a press conference this was not at all in the works but, you know, that is, let's say, the crisis is right now, the decree in place can last until the 31st of july being renewed every 30 days for 30 days so there's no question this will last longer than we thought. >> thank you so much i want to toss it over to becky who has a doctor waiting to speak with us. >> that's right. the chief medical officer at osmosis and former epidemic intelligent officer at the cdc and a doctor for amwell a u.s. telemedicine company doctor, thank you very much for being with us today. talk about what the united states is doing right now. lots of parts of the country are basically shut down. are we doing enough?

>> in short we're not. so if you look today we have more case in the u.s. than any other country in the world if you look in the aggregate by this weekend we'll have more cases than any other country has had cumulatively including china. so we have this disease at home. this is a major front for the disease and in term of locking down you just heard from your previous guest italy is locked down, many parts of europe is locked down. united states is not locked down and we haven't done that universally. we've done it state by state but the majority of states are still not locked down and so i think we're clearly not doing enough that's something we should have done weeks ago >> what else needs to be known if you're looking at places like new york, new jersey, connecticut, pennsylvania, california, start looking at all states that are locked down how long do you think those lockdowns will last in those areas >> it's a great question what we do is we have to look at the number of new cases per day

and it's rising. it's rising day on day on day and this is in the context of very minimal testing even in places like new york and california, the states you just mentioned we don't have near number of tests we need. we need on the order of ten times more testing we're doing very minimal testing. we're seeing far more case we need to do those two things first before we can begin how long the lockdown will last for. it's sort of asking how long should he look for worsening case that's not the thought or mindset we should have we should think about full core press. >> what do you think when you hear the administration or others start to talk about when this is over, could this to be done by easter >> yeah. the person in the administration that i listen to the most closely to is dr. fauci. dr. fauci is incredibly intelligent, very thoughtful, a

great leader at the moment and when dr. fauci says and listens to the same thing we aldo. he said that timeline was very flexible he was trying to be very helpful and articulate in walking a fine balance. i think it's very clear to hear dr. fauci speak about this that we need be testing. we need be very aggressive with locking more states down we need to think hard about getting more resources out that's what the conversation should be about. how do we get more health care workers feeling safe by getting more n-95s out there we need to raise the line to get more for health care workers not talking about relaxing the lockdown >> doctor, two questions would you shut down air traffic especially out of places like new york there are still people getting on planes, leaving hot spots like new york. we're starting to get hot spots like in atlanta, potentially florida and other places the other question, really

relates to this issue that you just talked about in terms of deadlines or timelines you know, this idea that we could have younger people or people who have been either immunized because they had it before or in areas that haven't been as impacted getting them back to work, that, by the way -- i talk to so many hedge fund managers that pushed the market back up we've gone back to work. is that practical in your mind >> no. not right now. so right now your first question we need to shut down air traffic out of new york and other hot spots, absolutely yes. everything that's non-essential to the functioning of a society needs to be shut down. that means we should keep grocery stores open, pharmacies open, fire department, police department, those things should stay up. what needs to be shut down is anything else. that's the first thing conthing there are hot spots popping up in atlanta and other

cities those hot spots are going to be huge tomorrow and the next day so the numbers are very clear, this thing grows even though it may not seem huge and maybe a small town out there somewhere it will be if we don't lock it down if there's talk of people going back to work and starting again -- the whole idea is keep in mind the economy is suffering because we have few people out there right now working if that makes sense. but we're going to have to lock it down for longer for every day we delay >> doctor, i want to thank you for being with us. we'll have you back again. >> thank you >> looking at his background, all these molecular biology degrees when he was 18, 18 years old. like one of those prodigies, i guess. jim bullard joinusnds a then

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. good morning break through. the white house and senate leaders reaching $2 trillion stimulus deal to help get american citizens and businesses

through the coronavirus outbreak stock futures all over the map today. up as much as 800 points and then down as much as 200 for the dow. we're tracking all the big moves. we have a special hour of big interviews ahead st. louis fed president james bullard, tom barrack and ben bern cnbc's breaking news coverage of the pandemic and market response continues right now. good morning, i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures have been all over the place now they have pare some of the loss we're down about 42 points on the dow. at the s&p, down 29. nasdaq down about 80 we had been up as much as 700 or 800 after that historic gain we saw yesterday. bear market rally some are calling of 12% or whatever it

was. i don't think it was that rally yesterday in point terms it was about 2300 points. i think that's what i saw, 12% or 13% treasury yields at this point, we'll take a quick look indicated at .851% andrew okay to our top story of the morning. that's the $2 trillion stimulus bill hashed out by white house and negotiates to send out cash payments to millions of americans plus aid for businesses both big and small. we want to get over to steve liesman with a look on what we know so far. and what it means for the u.s. economy. good morning, steve. >> reporter: good morning, andrew the check could soon be in the mail the senate apparently reaching a deal for $2 trillion stimulus bill this will be the third such bill passed and can go up to

something like 2 to $6 trillion. let's go through the details as reported by my colleague eamon javers checks for $1,200 to people making up to $75,000 of course there's a phase out. somebody over $100,000 according to portions of the bills i've seen doesn't get any money $2400 to couples making up to $150,000 $5 per child there will be $100 billion assistance for hospitals $350 for small businesses. there's that $500 billion aide for corporations some will go the airlines, some to the fed to be used as leverage to loan as much as $4 trillion from fed to small and medium businesses. let me read you something. it set people's, i don't know expectations for what this bill might mean for the economy this makes sense this deal in congress isn't

stimulus it's relief it's not designed to grow aggregate demand it's to keep individuals and businesses afloat until we can re-open businesses all week we've been trying to get who have under the into cnbc a little bit of background let's talk about something that andrew you and i have been discussing this issue of liquidity versus solvency the liquidity problem is when the money is going to come in, it's that you don't have it now but eventually be good for it. a solvency problem is you don't have the money now, it's not coming in and it's judged by either the lender or borrower that you'll never be good for it right now we have a liquidity problem and this money from the government is supposed to address that liquidity problems can become solvency problems and depending how long this shutdown lasts we might be talking about that and they are making it be some solvency problems. predominantly right now we're talking about liquidity problem. liquidity problems can be solved

with loans and we'll see or one time cash payments we'll see if this is enough. my guess this is a down payment. there's going to be a phase four bill that could potentially be a stimulus bill and not a relief people >> steve, just real quick. if you're a small business owner and watching the broadcast this morning and thinking about your business, maybe you're a restaurant, nail salon, something like that where you shutdown effectively, if you're a restaurant you're not sure if those meals you were going to be serving are not going to be served over the next several weeks if not longer. are you having a liquidity problem or solvency problem? >> it's a liquidity problem. let me tell you something. i've been a business reporter for like 30 years. i was a reporter in sarasota, in venice, did a lot of small business reporting in every one of they situation the number one advice is to call your banker. be on the phone with them, talk

to them, begin a discussion of how to work it out and to get from here to there don't wait for the government. call your banker, call a banker if you don't have one and see if you can figure something out a person that has a liquidity problem right now, some of the checks that are coming from the government, some of the loans could help them bridge that gap. when the business comes back they will be going along and swimming fine and it won't be a solvency rob it will be individual. some people living hand to mouth didn't have savings either in the business or their personal lives are going to be a lot more stressed than people who put a little money away for a rainy day. call your banker what everybody says in these situations be upfront and work something out. it's not easy but it can to be done >> steve, stick around we have another voice to join us on this conversation joining us on the phone is jaime bullard, the president of the st. louis fed. over the weekend he caught some

attention when he made the comment we could see jobless rate climbing to 30% in this country in the second quarter. could also see gdp slashed in half president bullard, thank you for being with us this morning >> great to be here. >> so, walk us through how you get to those numbers and if that's still what you think the case will be based on what you've seen in the past couple of days. >> sure. we do have expected macrop.m. during the pandemic adjustment period so ears can click on that. excuse me. we want to focus on the second quarter where i think most of the disruption will be it seems like it's taking forever to even get to the start of the second quarter. but we got plan ahead here and offer some focus i want to think in terms of a national pandemic adjustment period mostly q2, real gdp will be

reduced on purpose to meet health objectives. we just heard doctors talk about essential services and nothing else so it's essential services plus whatever can be produced at home you got to think that that's probably less than half the economy. we've been trying to do different calculations you can check out the blog on that but it's an investment in public health it's not a recession as conventionally defined because this is an intentional move being made here, planned partial shutdown of the u.s. economy mostly during the second quarter. if you look at these numbers, the u.s. gdp for a quarter is around $5 trillion if you cut that in half you're talking about producing only 2.5 trillion and that means 2.5 trillion less of household income that we would otherwise

have so i think $2 trillion package looks like it will pass the congress now is about right. it's scaled about right for the situation. and this is a relief we're not trying to move production into the second quarter. the whole idea is to hunker down, lie low, let the virus go away but, i guess my point on talking about this is that the numbers will be unparalleled don't get discouraged because this isn't at all comparable to past events in u.s. macro economic history this is a special quarter, and once the virus goes away, then things will -- if we play our cards right and keep everything in tact, everybody will go back to work and everybody will be fine part of that is we want to use the unemployment insurance program and i want to call that pandemic relief instead. we certainly want to encourage

heavy usage during the second quarter because the whole point is to get keep people whole, keep businesses whole during this period. so that they can get tied over and get to the conquarter. as far as the timeline, no one really know, but, you know, this virus might take other paths we don't really know but i think for planning purposes we want to think about the second quarter as the big hit quarter. >> does that mean you're anticipating at least at this point you could see a very sharp snap back, back to normal levels for the third quarter? >> so what i think would happen is if we play our cards right and the virus proceeds roughly speaking as it does in china, then the third quarter would be a transition quarter there will be talk about re-infection, all kinds of things but businesses will be coming back online and then at that

point in the fourth quarter, in the first quarter of next year, then i think you would see boom quarters where there's a lot of production at that point because there would be sort of a pent up demand and a lot of things that didn't get done. >> james, what the do you think just about the infrastructure? are we going to be able to handle all of the unemployment claims that come in? are we able to get this money immediately to the people who nieeed it the mo and the businesses that need it? >> that's a great question think of this as one huge project, and we're going to quick tracking the economy during this huge project, we're going to try to execute, execute the plan to keep everybody whole. and i think what you'll see is, you know, a little bit of chaos to try to get this going, but i

also think people will be inventive and be up to the task. they understand the situation and we'll get the whole thing done but it will be -- it's a big sprawling country and you got lots of people affected here so there's going lots of challenges hide. >> so when you talk -- >> have you heard anything >> i'm sorry i thought you were done >> when you mention something like 20% or 30% unemployment that's a rorschach the test. >> pandemic relief >> when you mention that it's a rorschach test gloom and doom people looking for, i don't know, after ma grm will say back in 2008 if we had 10%, 12%, 13% unemployment and s&p went below 700 if we get 30% unemployment then why shouldn't the s&p reflect, be three times lower than it was during the financial crisis and i've been saying this

because you, when you said this you were talking about that as a quarter or two quarter maybe event and it's not really an apples to apples comparison to look for loss in the market like that >> that's right. that's why i say it's not comparable you would have 4% unemployment, 4% unemployment, 30% unemployment, 4% unemployment, 4% unemployment so you would have a huge spike mostly centered in the second quarter, but everyone knows exactly what is that. that's pandemic relief that was done on purpose and, again, if we can get this to work right everything will snap back to normal once this is over >> steve >> jim, i'm wondering if you can tell me how the fed is going to loan to main street. is the st. louis fed one of the 12 district banks gearing up to

become a commercial bank how do you get loans both the federal reserve system and st. louis fed or money out to small businesses in order to tied them over to this very difficult period >> you know this is another great question i haven't actually seen the language in the bill, and so i don't really have a good idea about this we do lend, as you know, through the discount window to banks so the simplest, the simplest idea would be that the bank makes the loan to their small business that they know they know the customers all across the country, and that gets labelled as a pandemic loan, and that gets presented at the discount window and then we lend to the banks. so some kind of mechanism that looks like that would be, would be the simplest thing. again, i think this is moving

extremely fast so you want to use systems that are already in place, and channels that are already in place instead of setting up new infrastructure. if you set up new infrastructure it might take you 90 days and the whole thing is over by the time you get to that >> andrew? >> hey, jim, one of the things i'm trying to under and i think it's where joe was going with in terms of where the market is, i gather you think we're going to get back to 4% unemployment in relatively short order the question i would ask you, though, about that prediction is you look at places like las vegas, for example, you know do you genuinely believe that las vegas is going to be up and running at the levels it was four weeks ago, you know, come this fall? is that realistic, especially given the fact that this

continues to look like it's going to be a rolling prices, given that we haven't had a meaningful lockdown. you know, you'll have people even in china going, opening up movie theaters nobody is in them. when they do open them people have to be spaced out one seat empty to another seat empty. that could take a very, very longtime i'm trying found your thinking in terms of what unemployment really looks like and also what earnings these companies will have >> yeah. that's whyi say the third quarter, you know, again, everything depends on the virus. but the third quarter would be some kind of transition quarter where you can open things up and you take special precautions you are worried about re-infection but maybe testing will be better maybe other factors will be better and you'll have a better idea about where the virus really is

and then i think by the time -- this thing is temporary. so at some point you can say this is behind us for now. i'm sure this is going to shape public health for a longtime to come but it is temporary and wall street should be valuing these companies knowing that this is temporary and knowing that there's a lot of great production line out there in the future >> jim, it to thank you for your time today obviously things are changing pretty quickly we would love to how far back to get an update as you get more details and start implementing some of it >> thanks. >> jim bullard >> st. louis fed, right? st. louis cards, a shot at st. louis the other day, empty except for the beautiful arch.

checking u.s. futures, equity futures look green again at least for the dow at least for the dow so there's some components doing better than the overall averages like the s&p and the nasdaq. coming up one of the hardest hit private equity investors in the downturn and a friend of president trump, shares a warning on the multitrillion commercial mortgage market and you may have seen some of they comments in the last couple of days on very news ahe agree investigator, i won't mention any names. tom barrack will join us in a few minutes. and you can't miss ben bernanke. as we head to break take a look at the shares of boeing. that is helping the dow as we can see. company planning to restart production on the 737 max jet now by may that would end the shutdown that

lasted months. stay tune. cnbc coverage of breaking markets returns in a moment.

welcome back to box. let's take a quick look at u.s. equity futures we're moving, bouncing around all morning. dow looks like it could open up 100 points hire. much higher before went into the red. s&p 500 looks it will open off 15 points. nasdaq looking to open down about 45 point meantime senate and white house negotiators reaching an agreement overnight on that $2 trillion stimulus package combat the economic pain of the coronavirus. now billionaire tom barrage warning commercial mortgages are on the brink of collapse tom joins us this morning. he's ceo of colony capital tom good morning to you. thank you for joining us you have been sounding the alarm on the commercial real estate world and these mortgage backed securities and i want you to try

just for the audience so we all under where you're coming from walk us through what you call the dominos. >> great thanks andrew. thanks for having me on. this is a complicated topic and thanks to you and joe and becky, it's like hermes telling a story of a complicated cornell or m.i.t. math equation simple way to look at it is after the too big to fail consequence that you covered brilliantly, the banking industry changed and dodd-frank set capital requirements on banks that made it very restrictive for them to supply the normal mortgages to the small and middle size businesses so what steve was talking about earlier on liquidity and solvency is really the issue it's how does the money get to the little guys who are paying rent, who are paying interest on

mortgages, that have restaurant, cafe, warehouses, hospitals, hotels, and that's through these intermediaries which people cal nonbank banks. those nonbank banks originate mortgages. then they are pooled in securities and this is the danger of talking about mortgage backed securities, everybody reflects on 2008 and says these are mass destruction. that's not the case today. the problem that exists today is a liquidity event that was triggered by an unforeseen intervening governmental cessation of business. what happened in 2008 was over lending and risky lending and actually what exists today and the problem today is as a result of the solution. which is large equity amounts that are placed in front of that

banking stack. and what makes it all work is making sure the system flows, right, the plumbing works. and all we need today to make this work is a time-out. so when steve was saying earlier that what every borrower, every cafe owner, every restaurant owner and remember we're talking about 1 trillion of gdp here, that's 63 million people who are working generally around these businesses, the real estate businesses and they need to talk to their bank how do you have a conversation with a bank who has a lit any of regulatory requirements that tell them they can't forebearer and that's the key word. what everybody needs is a time-out simply a time-out. and the architecture --

>> how do you do the time-out? how do you create that holiday both for the mortgage payer or the renter, if you will, but then how do you create the time-out for somebody who is owning a commercial real estate as well so that the bank doesn't foreclose? >> right there's three easy ways. and none of them are ease i. you have the dream team here to do it. you have jay clayton at the sec, you have mcwilliam at the fdic, and mnuchkin at the treasury there's a regulatory stop on the market without being too complex, the idea of marking those loans to mark to a bank so they have capital charges why a bank can't come to a restaurant and say time-out you don't need to pay, we'll take tint, we'll take it on over

five years or take it on to the back of the bank and when this is all over which is 90, 180 days, we'll worry about it then. so you need regulatory relief primarily from the sec, cap accounting, these rules which were engineered after 2008 that say time-out on mark to market, let these intermediaries then go back to people who have rent and interest no problem you're not default we won't take away your houses same thing for banks they are not on default on regulatory requirements that is what needs to happen >> tom, if that doesn't happen, tell me what happens, actually, very specifically so people who may think this is self-serving, what would happen to colony capital if that does not happen? >> actually colony capital is in great shape. about 18 months ago we started selling assets we sold about 15 billion in

assets 1.4 billion in liquidity we shifted to a digital platform we have the best running the company. what happens specifically at the riit we have 6% in poifrt in security that's the arena where this stop many of our peers have much greater amounts of non-investment grade credit which stops right when payments stop the "market to market" -- there is no market remember so what's happening here there's a mark to market and there's no market so all of the collateral gets flushed. that's 3.5 trillion in commercial mortgages, 16 trillion of residential mortgages and you'll have chaos. you have chaos only because everybody just needed 60 to 90 days of breasting room not like it was in 2008.

>> does the stimulus plan at all that seems to be on the table now, help this in any way or no? >> not really. because look the stimulus plan they are doing the right thing the fed can do whatever they want but what that does, what people don't see that bill is primarily oriented to loans and investment grade corporations that could be levered by treasury 10-1. doesn't address the small and medium size businesses small and medium size businesses mostly have two issues rent and expenses. you need to give them forbearance, stop their rent interest, let them keep those employees hired as a result of that and look at it in 90 days if that doesn't happen there will be chaos. >> tom barrack i hope it doesn't turn into chaos. we appreciate you joining us

this morning and walking us through these dominos and we hope you stay healthy and safe >> you too thanks so much for having me >> meantime, just out of this morning. big ackm bill ackman writing letter to sharlsd. here's what he said. we believe it's inevitable to deal the critical care patient all states will eventually inshy at strong form non-essential business clours. because states can't close their boards a rolling program is highly suboptimal as it can be reinfected by visitors and can infect other states when they he depart in advance of a lockdown effectively suggests that even lockdowns in california and new york those lockdowns won't be able to end until the last state

ends their lockdown. that's a very interesting dynamic and very different what we're hearing out of washington from the business commune and administration about plan for all of this to end by easter joe? >> breaking economic data. durable goods numbers for the move february, rick santelli has that for us. >> the data for these february preliminary reads on durable goods, don't look so bad up 1.2 up 1.2%. that follows upward revised january file that moved from minus .2 to .1 transportation we get dinged capital spend and investment is down .8. that's fold by what was a nice pop in january, 1.1. if you look at orders and then switch to shipments it's down .7

on the shipment side not a horse bail number. many out there saying of course it will deteriorate and i agree. many saying oh, my god wait for jobless claims when you say tomb you can't go to work why is everybody so shocked when you count the people not going to work it goes higher but that's for another day back to you. i don't think -- i think becky lost audio >> yeah. i'm here i didn't know where we're going. i don't have a teleprompter. >> people have no idea that this actually seems sometimes the kind of work it's unbelievable the stuff that goes on behind-the-scenes. andrew, do you know what they installed for me i have a kill switch i guess it's a technical thing where your camera goes out i actually am controlling all that i'm controlling all that here.

>> you have a switch >> they put that in for. a kill switch. so there are times where you're trying to talk and it's not happening. i apologize for that i thought you should know. i'm kidding. >> it's why you're still going the nasdaq >> yeah, exactly i'm kidding, andrew. but it does happen things happen and when i was out at my house it was happening too. camera, the gremlins it just goes down and people at home don't understand. you want notice do this becky? >> i honestly don't know where we are >> you don't want to miss this because it's an honor to toss this to steve liesman and i don't want to take that from you but i will steve liesman, take it from me hey, steve >> reporter: hey, joe, thanks. so this february durable goods report is a harbinger back to better times when we had problems like the tariffs out there and there was a coronavirus problem in china so that's one of the thing i

think will be reflected in the investment numbers there and some other things. now the next set of numbers we'll get will reflect the investment problems and tissues here of the coronavirus being in the united states. so that's one set and now we got another set of issues here andrew has an interview coming up with former fed chairman ben bernan bernanke we thought it would be interesting to take a look back. you remember ben bernanke former fed chair marine through the financial crisis he was ably assisted by the new york fed president became the treasury secretary. who was ably assisted by bill dudley who was the head of the open markets group he went on to become the new york fed president with a change of the administration there. now it's powell in charge. he's been in charge since 2012, 2018 he had charge over domestic finance and also at the carlisle

group. i'm told he's talking to the treasury secretary all time. talking to congress. working with the other key players in the new york fed who include john williams. he was really a monetary policy expert, world renown he's had to come up to speed on these internal financial issues. he has a ph.d. in economics from stanford and then laurie logan who oversees hundreds of billions approaching trillions of dollars of purchase by the fed, running the open market at the fed she played important roles in developing the fed's 2008 crisis policies and been in the fed since 1999 it's unprecedented that this person now has the responsibility for what is essentially unlimited federal purchases. other people who have had this operation had restrictions on how much it could be

and they keep changing it. of course she's not making decisions in a vacuum. these three people are on the phone all of the time and they are the runs running this so far. they've rolled things out a lot. i've been impressed with one thing, not that they roll out every plan perfectly but they tweak them when i hear complaints about the way the fed designed the plan it's only a couple of days until the fed changes the plan and that's a good market response. people are happy to hear that. but that said there's still a lot of problems in credit markets. going to take time i'm hearing guys >> all right steve, thank you coming up, the latest on the fight to halt the spread of the virus. former fda commissioner dr. scott gottlieb and number of confirmed coronavirus cases in the united states now topping 55,000 more than 800 deaths and stay tuned for a special interview with former federal reserve chairman ben bernanke.

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the number of coronavirus cases in the united states is now more than 55,000, a ten fold

rising joining us now dr. scott gottlieb former fda commissioner and cnbc contributor and board member of pfizer doctor, do you get newspapers out there? are you -- did you see the "wall street journal" this morning, i'm referencing an op-ed piece that a couple of researchers out in stanford put it together about the mortality rate and i don't know what you think of this, but, you know, anything that i see that could be positive, i at least try to give it a fair shake. and they are arguing the mortality rate, we could be overestimating it by a factor of two, three, four or five even based on, i think, it's based on the denominator once again but they say it could be more akin to 3.4% than to even a 1% to 3% mortality rate did you read that article or do you think it's possible?

>> yeah, i saw it. we talked many times on this show about the mortality rate. it might be anywhere between .5 to 1%. when we figure out what the background rate of infection is we'll see the mortality rate is a little below 1%. but we need to be this is make lot of people. critically ill we shouldn't look at the case mortality rate but look at all the people who are having prolonged icu hospitalization and hospitalsare at a point of getting pressed and getting overwhelmed. one that happens the mortality rate will start to accelerate. >> doctor, two questions one is the president putinitingt

this deadline of guesting people back to work >> let's take new york city. governor said there are two to three weeks away from peak infections that's probably true you'll don't have hospitalizations increase for another two to three weeks after that peak. we're looking at a five to six week period between now and when hospitalizations will peak in new york city. maybe two to three weeks until you have cases peak and then they start to decline in new york city. we need to be getting all the resources we can into new york city this could become a major tipping point in new york. the question then becomes what cities are next? are there other cities seeded as much as new york, have similar sized outbreaks. you have to worry about miami, atlanta. i'm worried about new orleans. you look at cities like chicago with mass transit systems. so if we can keep another city

from having an epidemic on the scale of new york we can get through this more quickly. if other cities start to have epidemics at a staggered period and on the scale of new york where we have to marshal resources and move them into those cities this will be a longer epidemic for the entire country. >> scott, i know you spoke to doctors last night in new york city can you tell us what you heard >> it's a difficult situation. so, the hospitals are full they've creased their bed capacity they all implemented their emergency procedures to implement bed capacities the hospitals are near census. they are near census all events largely all events are being used and managing unstable patients in what we call step down units not in the medical intensive care units doctors are working long shifts. they are as maximum capacity nyu announced they will graduate

their medical student early to transition them into being interns. so new york city hospitals right now are on the brink of being what i would call maxed out in terms of their available capacity one state reached that point we'll start to see people go into other settings of care like theia activities center and hotels being set up anticipate steps they are taking to create bed capacity new york has another about five weeks to go for this between now and they are going hit peak hospitalizations the fact they are stretched right now is worrisome what we need to be doing is developing mobile, basically equivalent of "m.as.h." units and having them around the country. moving all the resource we can into new york city that once new york city gets over this hump we might need move knit to another city what china did successfully is bring in massive resources into wuhan and hubei province, thousands of doctors we don't have that luxury. we don't have the level of

control they have. but we need to do something equivalent if we can >> dr. gottlieb, thank you dr. gottlieb will be part of that special town hall program tonight pandemic 7:00 eastern time. other special guests include gary cohn and billionaire investor mark cuban. andrew thanks the federal reserve taking unprecedented series of steps to try to shore up the economy in recent days from cutting interest rates to near zero unveiling essentially an open ended quantitative easing program. reminiscent of the financial crisis but can be looked at as even bigger. joining us right now for some important perspective on all of this is ben bernanke he's the former fed chair and brookings institution distinguished fellow we appreciate you, ben, joining us this morning.

>> good morning. good to be here. >> chairman bernanke, if you could, i've seen you now say you don't think this is like the financial crisis, but given southeast steps the fed is taking it looks like it could be even bigger. how do you think about it? >> well the financial crisis was a collapse of the financial system that's where it started with the subprime mortgages and loss of confidence in the financial system credit broke down and then that was what hurt and, you know, really damaged the real economy, the rest of the economy. in this case it's kind of the other direction. of course, the source of the problem is the virus which is shutting down the economy, and putting a lot of businesses into hiatus but that means that the banks who are lending to those firms are, you know, taking losses or will take losses so the infection is going in the other direction from the economy to the financial system there's a lot of stress in the financial system right now

the good news is we came into this with a much stronger banking system, a much healthier banking system than we had in 2007 i'm hopeful it will stand up under the strain and help us be a positive force in getting back to normal. >> jim bullard just spoke with us and suggested that we walked into this in a 4% unemployment world. it might spike to 30% unemployment in second or third quarter but could see us at the end of the year or early 2021 to be back at 4%. does that make sense to you? there's questions about this snap back idea and whether that's possible. >> well, it is possible. could be a very sharp, short, i hope short recession in the next quarter or two because everything is shutting down, over course. and, you know, the gdp figures are calculated on an annual basis. so if activity is 10% lower this

quarter than last quarter you multiple that by four you say there's a 40% rate of decline. you can see some really scary numbers. unemployment will go up although not up to 30%. whether or not we'll snap back depends on a couple of things. depends first of all on the course of the virus. well our social distancing strategy work? will the virus big to die down will it perhaps be less dangerous in warmer weather? will we bend the curve enough that the hospital system can handle the number of cases so the len of time we're shut down will be important and then the second factor will be can we keep the economy healthy or at least functioning throughout this shutdown period. one of the thing you mentioned the fed, what the fed is trying to do is make sure credit is available so lots of businesses which are losing revenue because, you know, they are shut down will still be able to survive and when the all clear sound they will be able to tart back up again.

so there's not too much damage done to the workforce, to the businesses during the shutdown period however long that may be we could see a fairly quick rebound. but also the possibility that bankruptcies and people being laid off and we're not finding jobs during this shutdown period means it takes longer for things to get back to normal. >> chairman bernanke, one of the questions steve liesman was asking this morning given the bill and some of the steps the fed anticipates taking is how does the central bank become a commercial bank, because so much of what's now being planned effectively puts the fed in the position of effectively at least through banks and intermediaries but long money to nail salons and restaurants and small businesses >> well, the federal reserve has these emergency lending authorities called the 13-3

authorities which can lend to anybody that markets are broken down the fed does not have the capacity to, you know, decide whether a barber shop deserves a loan or not so it's got to work through other intermediaries for example, presumably this main street program that i hoped will be up and running soon will work through the banking system where the fed will provide funding, provide some credit protection to banks, and provide them therefore an incentive to extend the creditof their barbershop customers so the fed has got to work through other institutions it can't really make direct loans to businesses, just as a practical matter it will buy bonds. it will buy corporate bonds. it will buy ginnie mae and freddie mae mortgage-backed securities, but the individual

loans to companies, it's going to need some vehicle, some intermediary to work with those borrowers. >> i think joe has a question. >> i do. chair bernanke, thank you for coming on this morning the markets had a big day yesterday. part of it was anticipation of the deal some of it had to do with the fed action and it ran counter to what we were hearing, that the fed can't cure a virus the fed can do -- can do a lot obviously. we heard neel kashkari, he said basically they have infinite capabilities in terms of helping things you heard all these analogies. the fed is trying to use a wet spaghetti noodle to play pool, as a pool cue, when i think about that, which do you think is true, infinite ability or pushing on a string? >> i would put somewhere in between there. monetary policy is part of the

mix. the fed cut interest rates near zero starting essentially another quantitative easing program, that will help once the isolation is over. we're getting back to business monetary policy will help. monetary policy is not doing much now it doesn't do much to incentivize people to go out and buy when they can't leave their homes. the fed is using another set of powers, lending powers, which we used in the 2008 crisis as well. in a world where credit markets are not functioning well, that can be a big help. i would just like to say, i can say this now, since i'm six years away from being in the institution, i think the fed has been extremely proactive and jerome powell and his team have been working really hard gotten ahead of this have shown that they can set up a bunch of buy verse progrdivera will keep the economy functioning during the shutdown period so when the all-clear is

sounded we'll see a much better rebound than we otherwise would. >> chairman bernanke, we've been watching the markets, it seems every day we're quoting some new record we have not seen since 1931 you were a student of the great depression how is this going to be different than what happened back then? >> well, this is a very different animal than the great depression the great depression for one thing lasted 12 years. it came from human problems, monetary and financial shocks that hit the system, hit the global system. this has some of the same feel, the feel of panic, the feel of volatility you're talking about, but it's much closer to a major snowstorm or a natural disaster than it is to a classic 1930s style depression so it's quite different. different tools are necessary. i would like to emphasize that nothing is going to work

the fed won't help, fiscal policy won't help if we don't get the public health right. if we don't solve the problem of the virus, of the infections, making sure that the risk has declined sufficiently before we put people back in the line of fire the public health issue is the most important one if we can get that straight, we know how to get the economy working again. monetary and fiscal policy can do their thing and we won't have anything like the extended downturn we saw in -- even in the great recession much less the great depression of the '30s >> chair bernanke, on that issue, how much confidence do you have in the administration on the efforts that are being taken around the virus itself, the lockdowns that are place lachemann put out a letter saying we needed to have a nationaldowndo and that the

administration wasn't doing enough >> i'm not a public health expert your previous guest was. what he was saying is that it will take a while before we're sure that the rate of infection and sickness is something that our hospital system can handle we can address that both by isolation, social distancing, but also address it by really national effort to increase the hospital capacity to make sure there's enough beds, ventilators, doctors, enough nurses, enough masks so if we can get that part together, you know, that will shorten the period in which we have to, you know, lockdown the economy. we don't want to -- we don't want to put people back to work when the public health situation is still in bad shape because people start getting sick, the hospitals get overflowing, and then people will isolate themselves and the thing will not sustain.

it is important that before we put everybody back to work we feel like we have the public health situation under control >> ray dalio made a point on the program last week, that he worries about the market for treasuries, given the fact we'll be selling lots of treasuries. you'll have governments around the world doing that all at the same time, ultimately maybe the market for treasuries will only be central banks what do you think about that >> i think the long-run issue is national debt. we have to worry about the aging of the population, rising health care costs, those are the things we need to get straight before -- in the next decade or so before our national debt begins to rise at the moment there's big demand for treasuries of course they're paying low interest rates there's been some dislocation in the market for treasuries, probably due to deleveraging

the fed is buying treasuries in order to stabilize that market i think the treasury market will remain the most important financial market in the world. there's a big global demand for treasuries, even if there's some temporary glitches i certainly wouldn't argue that we should -- for fiscal conservativism reasons not do everything we need to do to address this problem in world war ii, in the 1940s, we had massive deficits, we had to do that we had to fight a war against germany and japan. eventually we paid back some of that, but right now i think that going big is right and i think the markets it will absorb the treasuries and the fed will help keep that market working in a smooth way dom chu asks does a prolonged age of ultra low interest rate

policy lend itself to more boom and bust cycles? do you think that's true >> you know, i think -- it's something we have to watch out for. you know, it's not evidently true if you look at japan, which has had zero interest rates for 30 years, i have not seen a whole lot of booms and busts in japan. but i think it's something you have to watch out for. the other thing i would say is low interest rates are not -- i know some of you will be skeptical, it's just a fact that low interest rates around the world are not primarily a monetary policy phenomenon interest rates around the world have been declining since the '80s if you look at the ten-year treasury yield since 1980, from then until now, 40 years, it looks like a ski slope just keeps coming down and down and down as i talked about before, i think what we have in the world is a global savings glut there's longer life spans, rising incomes, for a variety of

reasons a lot of savings in the world. any asset manager will tell you that it's hard to find good uses for that money so the -- even when monetary policy is at a normal level, and we got close to a normal level when the fed was raising rates earlier, interest rates will be much lower than in the past. low interest rates are something we'll have to live with for a while very likely. and we have to be alert about financial risk the fed is looking at that in much more detail than we used to again, it's not a monetary policy thing it's a long-term trend >> chair bernanke, thank you for joining us this morning. we appreciate the conversation hopefully we can continue to have this conversation as this story continues -- hope it doesn't continue that long but we appreciate your perspective. thank you. >> good to talk to you

>> that was great. thanks andrew, we have 20 seconds i wanted to look at the futures quickly again. the dow is now positive almost solely due, believe it or not, to boeing. not quite. 21 points for boeing you can do the math, 22 points the other averages are down. we'll be back tomorrow thanks, andrew up in connecticut -- thank you first, becky. but i -- i'll do that tomorrow we'll see everybody tomorrow cnbc's special coverage continues right now. >> welcome to "squawk on the street," i'm david faber along with jim cramer who is back at our headquarters, as he has been every day throughout this economic crisis. we start this morning, well, with the markets you heard joe kernen discuss the dow futures which are up, given the performance of boeing which has had a rebound. the markets seem to be retreating slightly from that historic move yesterday. jim, let me brin