The Road To Economic Recovery ‘could be a long, hard road’, Kashkari
Minneapolis Federal Reserve President Neel Kashkari Tuesday on said that the journey of economic recovery after the coronavirus threat settles “could be a long, hard road”
Kashkari who also witnessed the Fed’s attempt for revival in 2008 financial crises said that the expectations of a shaped recovery are highly optimistic and the reality is somewhat different.
“It would be wonderful if some new therapy were developed in the next couple of months,” Kashkari said. “Then potentially we would have a V-shaped recovery” – a phrase describing a steep market decline followed by a galloping rally.
“But barring some health-care miracle like that, it seems we’re going to have various phases of rolling flare ups,” Kashkari said, with “different parts of the economy turning back on, maybe turning back off again.”
“This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine. It’s hard to see a V-shaped recovery under that scenario,” Kashkari said.
This negative outlook for the US economy was backed by the shocking disclosure in the last week that saw over 6.6 million people claiming to be out of jobs in America in the last week. Dallas Mavericks’ owner too supported the statement when he said that a v-shaped recovery is not likely.
“People are not going to feel confident right off the bat. There’s going to be a lot of trepidation. That concern is going to lead to people holding back in spending money,” Cuban said.
Talking about the current stimulus package, kashkari expressed his worries that this amount may not be enough but he remains optimistic for more rollouts by congress.
“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.”