Federal Reserve Official Says that U.S. May Experience 18 Months of Rolling Shutdowns
Federal Reserve Bank of Minneapolis President Neel Kashkari believes that the U.S. economy could experience 18 months of rolling shutdowns as the Wuhan Virus outbreak dies down and potentially flares up again.
Kashkari maintains this position in the case that no effective therapy or vaccine is developed for the virus.
“We’re looking around the world. As they relax the economic controls, the virus flares back up again,” Kashkari declared on April 12, 2020 on CBS’s “Face the Nation.”
“We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine. I think we should all be focusing on an 18-month strategy for our health care system and our economy.”
Thanks to the government ordering businesses to shut down in order to contain the spread of the virus, unemployment has exploded in the last few weeks.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, commented on April 12 on CNN’s “State of the Union” that a partial reopening of the economy could potentially be rolled out in May. He did warn that the outbreak could resurface in the fall.
Kashkari admonished that “this could be a long hard road that we have ahead of us until we get either to an effective therapy or a vaccine.”
“It’s hard for me to see a V-shaped recovery under that scenario,” he stated.
The Federal Reserve responded in a decisive manner to combat the effects of the Wuhan Virus pandemic on the American economy. It launched an unprecedented number of emergency programs to back as much as $2.3 trillion in loans and cut interest rates almost down to zero.
The economic toll of these events has been quite devastating.
Nearly 17 million people have filed for unemployment benefits during the last three weeks. This signifies that there could be an unemployment rate of around 13 or 14 percent. Output in the second quarter is expected to plummet dramatically.
If the Fed continues taking drastic measures, America could be in for one of its strongest economic downturns in decades.