Top Federal Reserve official says United States needs another lockdown to save economy

Marco Green
August 4, 2020

Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank's headquarters in Minneapolis, Minnesota, U.S., January 10, 2020.

Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more US government spending to support the economy, saying it is up to lawmakers and the White House to put the job market back on track toward health.

The surging US savings rate means the country can afford to support Americans laid off due to the coronavirus pandemic, while a "hard" lockdown could deliver a faster economic recovery, a senior Federal Reserve official said on Sunday.

"We are going to see many, many more business failures, small businesses, large businesses, and it will take a long time to recover to rebuild those companies and then bring the workers back and re-engage them in the workforce", he added. a much slower recovery for all of us.

"I mean if we were to lock down really hard, I know I hate to even suggest it, people will be frustrated by it, but if we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it's happening in the Northeast right now", Kashkari said.

By contrast, Kashkari said, "I'm not anxious about it. Congress should use this opportunity to support the American people and the American economy".

In May, Democrats in the House of Representatives had approved a fourth stimulus package worth $3.0trn, with Republicans in the Senate having passed a proposal during the previous week for a $1.0trn package.

In an interview with ABC's This Week on Sunday, Treasury Secretary Steven Mnuchin said President Donald Trump would spend what was needed, but that the deficit was a factor. "I'm not anxious about it", he said.

He stated Congress is placed to spend big on coronavirus relief efforts since the country's spending plan space can be funded without relying on foreign loaning, provided just how much Americans are conserving.

Other reports by Click Lancashire

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