The world economy has never shut down this fast. In the U.S., virus-related layoffs are expected to be measured in the millions and soon. For insight into what\u0027s coming, we found someone with responsibilities over the economy now and who helped pull the U.S. out of the Great Recession of 2008. That person is Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. In 2008, he was the Treasury official in charge of the $700 billion rescue of the financial system. We met Kashkari this past Thursday for an eye-opening look at the stock market freefall, the near-freeze in the bond markets and a prediction for this economic emergency.Minneapolis Fed chief: Small businesses need forgivable loansNeel Kashkari: Millions of people are gonna lose their jobs. And that\u0027s what\u0027s so scary about this.Scott Pelley: Are we in a recession?Neel Kashkari: If we\u0027re not right now, we will be soon. My base case scenario is we\u0027ll at least have a mild recession like after 9\/11. The worst case would be we\u0027d have a deep recession like the 2008 financial crisis. We just don\u0027t know right now.Scott Pelley: And what\u0027s keeping us from knowing with any certainty?Neel Kashkari: Nobody knows how the virus is gonna progress, how many Americans are gonna get it, how effective is social distancing going to be, how long will it take the health care system to catch up?\u00a0Scott Pelley: Nationwide, last week there were almost 300,000 people filing first claims for unemployment benefits.Neel Kashkari: It could be five times that amount next week. Maybe more.\u00a0Scott Pelley: Where is the bottom?Neel Kashkari: If this is a three-month shutdown, we\u0027ll find the bottom pretty soon. If this is a year-long shutdown, this could be very damaging to the U.S. economy, and most importantly, to the American people.46-year-old Neel Kashkari has been president of the Federal Reserve Bank of Minneapolis since 2016. He\u0027s the son of Indian immigrants and literally a rocket scientist. As an engineer, he worked on NASA spacecraft. After Wharton business school, he joined investment firm Goldman Sachs. In 2008, as assistant Treasury secretary, Kashkari ran the $700 billion troubled asset relief program, known as TARP, that helped end the Great Recession. Kashkari was the Republican nominee for governor of California in 2014. Today, he is one of 12 Federal Reserve regional bank presidents who oversee and support the nation\u0027s largest banks.Neel Kashkari: I heard from a bank in our region, a well-to-do customer came in and said, "I wanna withdraw $600,000 of cash." Now, we can supply all the cash that the banks need to meet their customers\u0027 concerns. But it just speaks to the fear and the uncertainty that is rippling through the economy.Scott Pelley: Will the Federal Reserve ensure that banks have all the cash they need to satisfy whatever withdrawals may be coming?Neel Kashkari: Yes. This is the fundamental reason the Federal Reserve exists. We call it lender of last resort, this is literally why central banks exist. If everybody gets scared at the same time and they demand their money back, that\u0027s why the Federal Reserve is here, is to make sure that there\u0027s liquidity, that there\u0027s money to meet those demands. We will absolutely meet those demands.\u00a0Scott Pelley: Is the Fed just going to print money?Neel Kashkari: That\u0027s literally what Congress has told us to do. That\u0027s the authority that they\u0027ve given us, to print money and provide liquidity into the financial system. And that\u0027s how we do it. We create it electronically. And then we can also print it with the Treasury Department, print it so that you can get money outta your ATM.Scott Pelley: Are the banks sound?Neel Kashkari: They are right now. Now, we\u0027re hearing from big businesses across the country, including in Minnesota, that big businesses are drawing down their credit lines. They\u0027re borrowing money from the banks just because they\u0027re nervous. And if they\u0027re all drawing down these credit lines at the same time, it puts stress on the banking system. And that\u0027s where the Federal Reserve steps in to provide that liquidity to make sure that the banks have enough money to get out to their customers.The Dow has tumbled about 35%. But something else is wrong. Some investors lost confidence in bonds which normally do well in troubled times. The bond markets finance government, corporations, and by extension, homebuyers.\u00a0Scott Pelley: And the stresses you\u0027re seeing in the bond market are what?Neel Kashkari: Well, we were seeing stresses this week in the Treasury market and in the mortgage backed security market. And that\u0027s why the Fed stepped in with this very aggressive action to provide liquidity to those markets. We saw stresses in the commercial paper market, which is another type of bond market. And we\u0027re still seeing stresses in the municipal market, where state governments and cities fund themselves, and in the corporate bond market. So, we\u0027re not outta the woods yet.Scott Pelley: And by stresses, you mean what?Neel Kashkari: There\u0027s just a freezing up of new financings for corporations. That\u0027s something I\u0027m very focused on. We need to get that market open again. Because we don\u0027t want blue-chip American companies, who have customers, who are operating, we don\u0027t want this virus to creep into their businesses because they\u0027re not able to raise money to meet their basic operational needs. We need them to keep running.Scott Pelley: Solid blue-chip American companies are having trouble borrowing money?Neel Kashkari: It\u0027s more expensive for them to borrow money. Say someone\u0027s saying, "I\u0027m gonna go issue $1 billion of debt to go fund my new factory," those aren\u0027t taking place right now.\u00a0Scott Pelley: People are shunning U.S. Treasury Bonds, which are always thought to be the safest possible investment?Neel Kashkari: It is. Now, keep in mind, Treasury Bond prices are still very high relative to history. They\u0027ve just been just not quite as high as they were a few weeks ago. So they still are viewed as a very safe investment, very attractive for a lotta people. But this fear of where the virus is going to go is leading people to say, "I just want cash. And if that\u0027s cash under my mattress or in my safe, I\u0027ll sleep better at night."\u00a0Scott Pelley: What\u0027s it gonna take to get the bond markets working again?Neel Kashkari: I think a combination of factors. I think Congress taking bold action to say they\u0027re standing behind the U.S. economy, the $1 trillion stimulus they\u0027re talking about. I think that\u0027ll help. I think continued actions from the Federal Reserve will help. And I think more confidence that the health care system is catching up to the crisis.\u00a0This past Sunday, the Fed dropped interest rates nearly to zero. Then every day last week it announced emergency lending programs. It pledged to spend at least $700 billion supporting mortgages, banks, money market mutual funds, corporate bonds and lending to central banks of other countries because the dollar is the currency of world trade.\u00a0Neel Kashkari: We\u0027re being very aggressive. And I think our chairman, Jay Powell, has learned from the experience of 2008. We\u0027re moving much faster than we moved in 2008. We\u0027re being more aggressive. Is there more we can do? Yes. Is there more we may end up doing? Yes. But I think we\u0027re being very aggressive. I think that\u0027s the right thing.Scott Pelley: Can you characterize everything that the Fed has done this past week as essentially flooding the system with money?Neel Kashkari: Yes. Exactly.\u00a0Scott Pelley: And there\u0027s no end to your ability to do that?Neel Kashkari: There is no end to our ability to do that.\u00a0Scott Pelley: What did we learn from 2008 when you were in the Treasury Department? And how is that being applied today?Neel Kashkari: There are two big mistakes when I look back at 2008 that we made that I think are relevant today. Number one, we were always too slow and too timid in responding to the crisis. The reason is we didn\u0027t know how bad it was gonna get. And we didn\u0027t wanna overreact. And it turned out it got really, really bad. And the right answer should\u0027ve been overreacting to try to avoid the devastating recession that we ended up happening. So today, whether it\u0027s health care policy makers, fiscal policy makers, which means Congress or the Federal Reserve, we should all be erring on the side of overreacting to try to avoid the worst economic outcomes. And number two, in 2008, we tried to be very targeted in helping homeowners. Only helping homeowners who needed a little bit of help because a lot of Americans were angry at the thought of their neighbor getting a bailout for being irresponsible or so they thought. So we tried to target our program. It ended up we didn\u0027t help very many people.We would\u0027ve been much better off if we had been much more generous in our support for homeowners, deserving and not deserving. We would\u0027ve had a less crisis. So my advice to Congress as they\u0027re designing their programs to help workers and to help small businesses, err on being generous.\u00a0Scott Pelley: When America gets back to work, how long does it take to recover from this?Neel Kashkari: You know, the economy can bounce back fairly quickly. It\u0027s the workers that take time. I mean, that\u0027s the-- one of the other lessons from 2008. It took more than ten years to put America fully back to work, relative to where they were before the crisis. Ten years. And so that\u0027s what we have to try to avoid, having these mass layoffs. We can\u0027t have another ten-year recovery.\u00a0The deadline for filing taxes, both personal and business, has been postponed until July. This past week, the House and the Senate proposed trillion dollar emergency spending plans. The bills envision sending government checks directly to households, expansion of unemployment insurance, corporate tax cuts and relief for small business. Republicans and Democrats are haggling over the details.\u00a0Scott Pelley: Well, what do the small businesses need?Neel Kashkari: I think that they need forgivable loans. Like, it\u0027s much better if we can keep small businesses to retain their workers than to lay them off. \u00a0Scott Pelley: What do you mean by forgivable loans?Neel Kashkari: I\u0027ve heard a proposal that if the government made a loan to a small business, if they retain their workers, the government would forgive the loan after a couple years. Just to avoid the mass layoffs that we\u0027re starting to see right now.\u00a0Scott Pelley: Sort of a bridge loan to get the local restaurant or the local mechanic through this period of time?Neel Kashkari: That\u0027s right. And importantly, keeping their workers employed. That\u0027s much better because once people are lost into the sidelines, it just takes a long time to get them back.\u00a0The Federal Reserve System as we know it was set up in the Great Depression to regulate big banks, set interest rates and be the source of all cash. That\u0027s why every bill in your pocket is inscribed, "Federal Reserve Note." The Fed\u0027s mandate is to provide the highest rate of employment with the lowest rate of inflation. But in 2008, it invoked its authority for the first time to take the role of emergency first responder.Scott Pelley: If the current measures are not enough, what else can the Fed do?Neel Kashkari: Well, we have very broad authorities with our emergency lending authorities that have to be done in concert with the Treasury secretary. We\u0027ve announced a couple of those measures this week on money markets and commercial paper as an example. Some people have suggested that we should be providing more support directly to the corporate bond market. And I\u0027m sympathetic with those views and also the municipal market. Making sure that states and cities are able to access the capital markets as well.\u00a0 So, there\u0027s a range of things the Federal Reserve could do. We\u0027re far from out of ammunition.Scott Pelley: Far from out of ammunition. Sunday, the Federal Reserve lowered its benchmark interest rate to zero. Can you go below zero?Neel Kashkari: In theory, we could. Some countries have. I don\u0027t think many of us-- I don\u0027t think any of us on the committee think that\u0027s a particularly good idea. It creates other challenges for financial markets. But in the last crisis, we\u0027ve used something called quantitative easing, buying long-term bonds. We\u0027ve got a lot more experience in how to do that. It didn\u0027t trigger inflation. So, there\u0027re other tools that we\u0027ve used before that I think we could also use again in using it aggressively.States face an enormous surge in unemployment claims. Connecticut alone, which normally has a little over 2,000 claims a week, saw 72,000 last week. When the national number of new claims for unemployment is released Thursday, it\u0027s expected to be in the millions. The Fed is watching China and South Korea, where the outbreak appears to be subsiding.\u00a0Scott Pelley: What are you seeing in China?Neel Kashkari: Well-- China appears to be turning back on. And they are telling a very good story that they\u0027ve got their arms around this, they don\u0027t have new cases. But if, at the same time, they\u0027re saying lots of people had the disease with no symptoms. So, unless you\u0027ve tested everybody, how do you know that you\u0027ve really got this under control? And as you relax the economic control, does the virus simply flare back up again? We just don\u0027t know yet.\u00a0Scott Pelley: To the person who is about to grab their car keys and go to the ATM and take out $3,000, you say what?Neel Kashkari: You don\u0027t need to. Your ATM is safe. Your banks are safe. There\u0027s enough cash in the financial system. And there\u0027s an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure that there\u0027s enough cash in the banking system.Scott Pelley: Are you optimistic or pessimistic?Neel Kashkari: Overall, I\u0027m optimistic. having been at the frontline of the 2008 financial crisis and I saw how devastating that was, we did get through it. It was very painful for millions of Americans. We did get through it. We will get through this crisis.Produced by Henry Schuster. Associate producer, Sarah Turcotte. Edited by Sean Kelly. Broadcast associate, Ian Flickinger.