Sunday on ABC’s “This Week,” the president of the Federal Reserve Bank of Minneapolis Neel Kashkari said the “worst is yet to come” on unemployment driven by the coronavirus pandemic.
Stephanopoulos asked, “We see the market pricing in that relatively rapid sustained recovery you just heard Larry Kudlow saying he expects a very strong second half of 2020 and a roaring 2021, is that realistic?”
Kashkari said, “I wish it were. This is more likely to be a slow, more gradual recovery. Unfortunately, the virus continues to spread. People continue to get it. Unfortunately, people are tragically dying. When we look around the world, there’s evidence when countries relax their economic controls, the virus tends to flare back up again. The more this goes on, the gradual the recovery will be. If we see companies going through bankruptcy, empty strip malls for a while until new businesses form, the economic recovery takes longer. I loved to see a robust economy, that would require a breakthrough in a vaccine, widespread testing, a breakthrough in therapies to give all of us confidence that it’s safe to go back. I don’t know when we’ll have that confidence. Ultimately the American people will decide how long the shutdown is.”
He added, “The worst is yet to come on the job front, unfortunately. It’s really going to be, as these states start to reopen, and as thee these businesses start to reopen, obviously we need to reopen safely, and we need to monitor and look for signs of things flaring back up. We may have to clamp back down again as the virus continues to spread. To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”
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