U.S. Federal Reserve leaders have expressed mixed views on what will help the world’s largest economy get back on track in the face of a worrying surge in COVID.
Federal Reserve leaders differ in their views on how to revive the country’s virus-ridden economy in the face of a worrying spike in coronavirus infections.
For St. Louis Fed President James Bullard, the current surge in coronavirus cases can be controlled and the economy can rebound if only households are driven in the right direction and admonished to wear masks and this time around take other steps that health officials have been pressing since March.
New York Fed President John Williams believes a full economic recovery will have to wait for a vaccine, with the health crisis calling the economy into question until then.
Minneapolis Fed President Neel Kashkari has called for a four to six week national lockdown to try to stop the pandemic.
In one of the most technocratic, PhD institutions in the country, months of unique focus on the path of the pandemic and its impact on the US economy have resulted in: Who the hell knows?
Separate comments from Williams and Bullard on Friday set out the competing ideas floating around at the Federal Reserve, where things are and what could happen in the months ahead. Kashkari called for a lockdown earlier this year, the only Fed policy maker to advocate such an extreme move.
Fed policy is likely to be set for both outcomes, although discussion could influence the wider debate about how other branches of government should react if the pandemic worsens.
New infections each day in the United States topped 163,000 on Thursday and exceeded 100,000 for a ninth straight day. The death toll rose 1,173 to a total of 242,982. In some states, hospitals are at full capacity.
Millions of Americans remain unemployed and some industries, such as entertainment and hospitality, remain severely disabled.
Still, Bullard said Friday that he believes the roughly $ 3 trillion pandemic-related relief passed by Congress in the spring would be large enough to handle most of the aftermath of the ensuing recession, which he believes ended in April with the start of a rebound continues to move faster than expected.
Businesses and households are adapting and “a large part of the economy is able to produce its goods or services despite struggling with the pandemic … and they can be produced safely,” Bullard said on a webcast to Economic Club of Memphis.
The freaky still need help, Bullard admitted, but targeted help, coupled with stricter attention to personal hygiene, should contain the pandemic and enable recovery, even if a vaccine takes longer than expected.
Williams credited that tax aid to accelerating the recovery, saying it was “the reason consumers can still spend”. However, he feared that the economy would remain hampered until vaccination.
The advances recently announced on that front showed “positive signs” of the possibility of going beyond COVID-19 in the next year, Williams said in an interview with the Financial Times.
Pfizer Inc announced earlier this week that its experimental COVID-19 vaccine is more than 90 percent effective according to initial trial results.
But the economy is still in “a deep hole” and “the very sharp surge in COVID cases recently has clearly questioned whether the economy can survive this period,” Williams said.