>> there's been a lot of talk about, you know, you guys have had ken rogoff on a few times.ece about how rates should be at negative 3% in the front end we've seen lakota with some blog pieces as well arguing the same thing. this debate has been there for a while and the actors are all the same and that is exactly what you would have expected powell to say he said nothing different than the party line, we didn't like it before, we don't like it now. but what was very interesting, he used the word for now in one of his responses he said, there are some people that are fans of it, but for now the committee is not looking for now is a very interesting set of words coming from a fed official it's not something off the table completely and if i'm remembering, it was rick santelli in a somewhat heated debate with steve liesman was arguing, yes, the door was not shut today, not clamped tight, is what he said and i agree with him and i think a lot of people expected it to be more clamped tight and it wasn't. so this was a move away from what i thought would have been an outright den

with us now is ken rogoff. professor, great to have you with us. >> thank you >> deeply negative meani ining u 3% walk us through the scenario in which this makes sense >> first of all, you can't do it the fed did not prepare for it in 2018 and 2019 you need to be prevent people from hoarding cash, make changes to tax, legal, other things. none of these are huge obstacles that can be done look at what the fed is doing. basically, buying huge swaths of corporate debt, junk bonds ford motor might be paying 8 or 9% on markets but borrowing from the fed. boeing is able to stay afloat without having to have any conditions yet if we get out of this quickly and the v shape recovery that feels like it's built into the market at this point takes place, no problem. if, for example, we have a second wave of infections in the fall, maybe even greater than this one or many further smaller waves and this goes on for a long time. a lot of restructuring needs to be done. you can't just guarantee every credit in the economy. yo

let me quote to you another respected economic — i know you know him well — ken rogoff, who has writteno economic growth. he says, "any sensible policy right now is going to have us racking up the deficit for a long time". and he says, "if we go up another $10 trillion, i would not even blink at that right now". so he is saying this is a very special, unprecedented situation and our responses need to be unprecedented, too. we have to be careful in two ways. one, of course, is i do think we will require much more money to be spent, but it may not be in propping entities up and trying to make sure nothing changes. but it might be in ensuring there is a substantial stimulus so that the massive unemployment that we have starts being brought down relatively quickly going forward. this may take the form, for example, of a massive infrastructure package in the us, but what i am saying is we need to start shifting because we will need resources for that also down the line. and of course, the post—covid world will require stronger worker protections, better healthcare. that will also require mon

to stand on and one of their famous papers paper by 2 harvard professors carmen reinhart and ken rogoff it turned out their big result was based on the spread sheet here so they didn't have a leg to stand on it's very hard to see what anyone in the u.k. hoping to get from austerity we had it as in the us as well not quite as bad but it's slowed growth kept people from getting jobs reduced wages it was really bad news for large segments of the population and it's very hard to see what the dividend was because one of the architects of austerity in the air in the u.k. he's now in the editor of a local london paper george osborne he's expressed support actually jeremy kuhlmann successor as they believe to him he is saying already that we're going to need austerity in the post pandemic post coronavirus pandemic world is that is that going to be again the policy make is a. strategy of choice well i can't say how things will turn out there or here but we will see people argue you know it's a safe bet and again i mean economists i could give you the evidence and what i'd like to hold up is japa

the public won't put up with this, and this buttresses up against ken rogoff and marvin goodfriend talking do interest rates -- negative interest rates we have to do them with a larger impulse. have we done negative interest rates and a half assed way? valentin: it depends on the economy we are dealing with. , all parts of the government central bank are working in tandem with one goal, furtherurage dis--- swiss franc depreciation. thebiggest kiwi out there, balance sheet of the swiss national bank -- qed out there, the biggest -- the important thing is that negative rates could work only in tandem with other aggressive easing measures. in isolation or when they are not accompanied by fiscal fail, andthey may be the best example of that. back,e are going to come valentin marinov with credit agricole. our first word news in new york city. ritika: one economist says this might be the worst macro economic data report in u.s. history. the government comes out with april jobs numbers at 8:30 and it is likely to show that 22 million jobs were lost, 11 times the previous record decline in world w

and onto vice chairman fisher with a shout out to ken rogoff as well because things are different.k then when we had strong dollar it was within a fixed regime with more stickiness in the system. now it is everyone for themselves. are we better off now, are our viewers better off now with foreign currency exchange payers? brush, theth a broad answer is yes. exchange rates can be potentially shock absorbers and at present, we are going there -- for a fundal mental fundamental shift on the emerging market. many economies and currencies that were managed quite carefully are being given a lot of room to adjust, partly ,ecause there are few levers which has meant sharp depreciation in emerging-market currencies. in london, people pay more attention to brazil, but the policy universe has discovered that the exchange rate can be very useful as a shock absorber. i don't expect any return to discovering that stability will be of higher value. within the g10, universe, the idea of competitive depreciation is still a concern. we touched on deglobalization and u.s.-china trade tensions and the

ken rogoff talking about a five year recovery was very dire. if you listen to some of the investment committee today, you've gotten some very good advice which is there's some good strong core companies to own. i think you have a safe portion to your portfolio. you do have that more opportunistic portion. one of them is going to be right. one will be wrong. >> josh brown, let's get your thought on this really quick given what you have noticed about the jobs report and the economic data we're expecting to see in the coming weeks and months here, what exactly then is your positioning? how are your clients looking at their portfolios and saying this is how i position myself for what could be the uncertainty coming in the next few weeks or so >> i think one of the key things and i talk about this is lot is we set expectations in advance so people understand we're not playing against the nasdaq 100 with people's like entire life savings. it's inappropriate it's not what they need to retire the most important thing we can do for people is set the rig

we've got -- talked to ken rogoff last night, thought a double digit unemployment until at least middle1. what's your guess? do you think we'll still going to be -- does that make sense to you? >> rii'm very good friends with ken and have a great deal of respect. he is another colleague from harvard i've interacted with who has a completely opposite view. truth is economisting are in unchartered waters now and it's something we figure out maybe even with 2020 hindsight, won't be able to see clearly what actually happened. if you look at the capital stock of the u.s., it's whole. look at the human capital stock in the u.s., that most working-age people can still go back to work. of course, there have been tragic losses, but the main inputs to society are there. so then the question is, what happens to demand? is there enough demand to get those in? >> right. unfortunately -- >> yeah. but the point is -- >> that's the thing that's kept us going. right? >> well, a lot of demand right now looking at the realtime data. in fact, you can see pent-up demands, where for some of the measures we l

market industry in the united states although there's some pretty good academic research, i think ken rogoff behind this saying if you set it based upon the underperformance of the u.s. economy you would set rates in a deeply negative place right now. >> that's a big debate but just like you reported weighing in perhaps against it for now we'll have more i'm sure hopefully not. that means the economy is better we don't want that debate. see you then. >> good point. >>> despite the record unemployment figures and concerns of a slow recovery, the stock market keeps going on. how long can this continue joining me now is jason brady, terry spath, both of them manage funds outperforming the market right now and tom porcelli it is great to have you all here tom, on the negative rates thing, have you kind of taken a stance on this one way or the other? >> yeah. it's i think steve nailed it it won't happen, at least not now. there's no imperrical evidence to show it helps any countries doing it there's punitive economic outcomes associated with it, not the least of which is capital flight we saw tha

>> i think i've -- i finally stunned ken -- we'll get ken rogoff back if we can.finish the point i was making, though, for those of you who are invested in the markets, this is an important point, down 8 1/2% for the year. for people that were looking at 30% plus drops earlier in the year, 8 1/2% is not as bad. a lot of people follow the dow. the dow is down a lot more than the s&p 500 is. ken, do you have any logical or sentimental explanation for why the markets have staged such a comeback when the economy hasn't? >> memories from 2008 are very much alive, where the market didn't just come back it came back even more. nobody wants to miss it. i think the markets are thrilled the fed is buying the junk bonds and doing a lot to save the markets. i think we should be worried about a second wave. they say anti-virals and are more optimistic. trillions of dollars in the markets, i'm skeptical. i don't think it's going to be that smooth. >> we gave the airlines a grant to keep their people on payroll as much as possible. we've got the paycheck protection program. emer

you need big things from government that will do it for the exchange coming up next, harvard's ken rogoff his case for negative interest rates. ceo of penn national gaming will tell us why he's staying positive power lunch is up after a quick break. - [narrator] at southern new hampshire university, we're committed to making college more accessible by making it more affordable, that's why we're keeping our tuition the same through the year 2021. - i knew snhu was the place for me when i saw how affordable it was. i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at snhu.edu. woi felt completely helpless.hed online. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-87

i'd like to welcome professo ken rogoff, thank you for joining me, these are trying times, of course. indeed, thank you for having me >> listen, today's a big day we reintroducing after decades of absence a 20-year bond but it underscores the notion of debt last thursday, the fed's balance sheet was approaching $7 trillion, i believe the exact amount was 6. 3 trillion on their balance sheet. and we learned when we had treasury secretary steve mnuchin on, the cares act, only 8 to 9% has been spent and we're hearing for the need for more. as a man and a great economist who's written much about debt, even with the coronavirus issues are we ahead of ourselves? are we over the skis on debt >> we're only two months into this, and it's probably going to get a lot worse. i think we have to support americans, we have to support the economy. i don't know where this is going. but we're down 25 or 30%, we're hoping we're coming back now, i don't know how much. and this isn't quite the time to worry about that i mean, there are costs, there are long-run costs to having debt way higher than it was.

former chief economist and harvard university economic and public policy professor ken rogoff joins me now. always a pleasure to see you. thank you for joining us. >> thank you, maria. maria: were you surprised to see the fed buying these bond etfs. i want to ask you of course about this new lending facility and what your expectations are. >> well, obviously it's a huge development. i mean, i think the first thing to say is the fed has been holding up the economy and what the fed has done has probably had more impact in sort of holding up firms, holding up markets, even than the $3 trillion in stimulus. they've been heros. but this is obviously a big step into what we call directed credit. it is war-time finance. it's a really dramatic move. i feel that they felt they had to do it and i think the question is, well, fine if the economy gets better in a few months. but are we going to sort of slide into sort of a central bank socialism over a longer term which actually you'll find people in the progressives who want. maria: jon hilsenrath? jon: ken, in addition to what the fed is doing f