Fed's Kaplan: US economy to have significant, historic contraction in Q2

Marco Green
June 15, 2020

Systemic racism and high unemployment levels among black and Hispanic Americans create a drag on the USA economy, Dallas Federal Reserve President Robert Kaplan said on Sunday.

Asked by host Margaret Brennan whether he agreed with Atlanta Federal Reserve Bank President Raphael Bostic's quote last week that "Systemic racism is a yoke that drags on the American economy" and that the USA has a "moral and economic imperative to end these unjust and destructive practices", Kaplan said he agreed.

"If people wear masks widely, if we have extensive testing and contact tracing, if businesses and us as individuals follow good procedure, we're going to grow faster", Kaplan said during a virtual discussion organized by the Money Marketeers of New York University.

"I have certain concerns about it, but I wouldn't rule it out" said Kaplan, adding that he wants to make sure the Fed doesn't create "more distortions" in financial markets.

Kaplan said he agreed with his counterpart at the Atlanta Federal Reserve Bank, Raphael Bostic - the Fed's only African-American policymaker - who on Friday issued an impassioned call for an end to racism and laid out ways the USA central bank can help. That started to improve dramatically in the last few years.

Kaplan said the rate would end the year at 8% or more. It's in the interest of the U.S. The fastest-growing demographic groups are blacks and Hispanics. Kaplan said in May that the unemployment rate could peak at 20% in 2020.

Other reports by Click Lancashire

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