America should brace itself for 18 MONTHS of shutdowns as US economy faces ‘long, hard road’ to recovery from coronavirus pandemic, Federal Reserve President warns
- Federal Reserve Bank President Neel Kashkari says he expects the journey to economic recovery from the coronavirus pandemic will be a ‘long, hard road’
- Kashkari said projections for a quick economic turnaround were optimistic unless a vaccine for COVID-19 became available in the next few months
- He warned that Americans should prepare themselves for 18 months of rolling shutdowns, as parts of the economy are likely to shut on and off again
- In the last three weeks, the US has suffered in excess of 16 million job losses – equivalent to nearly 10 percent of the nation’s workforce
- As of Sunday night, as many as 22,701 Americans had died from coronavirus
- Learn more about how to help people impacted by COVID
Minneapolis Federal Reserve Bank President Neel Kashkari says the US economy is facing a ‘long, hard road’ ahead as it attempts to bounce back from the coronavirus pandemic, warning Americans to brace themselves for 18 months of shutdowns.
In an interview on CBS’s ‘Face the Nation’ on Sunday, Kashkari said projections for a quick economic turnaround were overly optimistic unless a vaccine for COVID-19 became available in the next few months.
‘It would be wonderful if some new therapy were developed in the next couple months,’ Kashkari said. ‘Then potentially we would have a V-shaped recovery’ – a term which describes a steep market decline followed by a quick resurgence.
But Kashkari, who oversaw the U.S.’s Troubled Asset Relief Program implemented in the wake of the 2008 financial crisis, gloomily added: ‘[That] barring some health-care miracle, it seems we’re going to have various phases of rolling flare ups.’
In an interview on CBS’s ‘Face the Nation’ on Sunday, Kashkari said projections for a quick economic turnaround were overly optimistic unless a vaccine for COVID-19 became available in the next few months
Kashkari, who oversaw the Troubled Asset Relief Program that the U.S. implemented in the wake of the 2008 financial crisis, told Americans to brace themselves for 18 months of shutdowns (Pictured: A man crosses the street at a nearly empty Time Square on April 9)
Such with a process, according to Kashkari, would involve ‘different parts of the economy turning back on, [and] maybe turning back off again,’ as part of an 18-month strategy.
Looking ahead, Kashkari says he isn’t expecting the U.S. economy to bounce back quickly.
‘This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine,’ he added. ‘It’s hard for me to see a V-shaped recovery under that scenario.’
In the last three weeks, the US has suffered in excess of 16 million job losses – equivalent to nearly 10 percent of the nation’s workforce.
Kashkari’s comments followed signals from President Donald Trump that he wants to re-open the economy sooner than anticipated in order to stem the bleed.
Trump said on Friday that he would unveil a new advisory group this week that would focus its efforts on the process of economic opening.
As of Sunday night, as many as 22,701 Americans had died from coronavirus. Public health experts have warned the U.S. death toll could surge to more than 200,000 over the summer if the unprecedented stay-at-home orders that have closed businesses and kept most Americans indoors are lifted when they expire at the end of the month.
In the last three weeks, the US has suffered in excess of 16 million job losses – equivalent to nearly 10 percent of the nation’s workforce (Pictured: Canal Street stands empty during rush hour in New Orleans, Louisiana, on April 8)
Kashkari said additional support was also needed for small businesses beyond the $350 billion provided in the coronavirus aid package passed in March, but he was ‘optimistic’ that Congress would approve more funding to help keep businesses from folding under the strain of strict social distancing measures.
‘But then again, we don’t know if this support is going to be long enough,’ Kashkari added, ‘because if we need to have different phases of shutdowns for the next several months or until we have a therapy or vaccine, we’re going to need more help than that.’
Meanwhile, the Federal Reserve is being ‘aggressive’ in its approach to softening the blow of the pandemic’s impact Kashkari said, with the central bank announcing a number of new programs last week, lending us much as $2.3 trillion to businesses and governments.