The president of the Minneapolis Federal Reserve isn’t expecting the rapid “V-shaped” economic recovery being projected by many in the Trump administration.
The United States hit historically high unemployment levels in the month of April, with an unemployment rate of 14.7%. Many members of the Trump administration have predicted a rapid economic turnaround when businesses are allowed to reopen as the coronavirus pandemic tapers off. Minneapolis Federal Reserve President Neel Kashkari gave a more reserved prediction during a Sunday interview on ABC’s This Week.
“What I’ve learned in the last few months, unfortunately, is this is more likely to be a slow, more gradual recovery,” Kashkari said. “Unfortunately, the virus continues to spread. People continue to get it. Unfortunately, people are tragically dying, and when we look around the world, there’s evidence that when countries relax their economic controls, the virus tends to flare back up again.”
“The longer this goes on, unfortunately, the more gradual the recovery is likely to be. If we see a lot of small businesses going through bankruptcy where you’re going to have empty strip malls for a while until new businesses form, the recovery ends up taking a lot longer,” he added.
Kashkari said a speedy recovery would require a breakthrough in testing, vaccines, or treatments that allow citizens peace of mind while returning to work, shopping, and dining out. He added, “Ultimately, the American people are going to decide how long the shutdown is.”
On Sunday, White House economic adviser Kevin Hassett predicted that the unemployment rate would exceed 20% in the coming months but that the second half of 2020 would see significant growth as businesses are allowed to reopen.
