S. and perhaps many nations could face 18 months of rolling shutdowns without an appropriate cure or antidote for the new coronavirus as the epidemic recedes and flares up again, Federal Reserve Bank of Minneapolis President Neel Kashkari said.
“We are looking the world over. As they relax the economic restraints, the epidemic flares up again,” Kashkari said on CBS’ “Face the Country” Sunday. Kashkari is a member of the Federal Free Market Committee’s mechanism-setting mechanism in 2020.
“We will have these floods of flare-ups, alarms, flare-ups and tests before we have a treatment or a vaccine eventually. I think we will just focus on an 18-month plan for our health care system and our economy.” He added.
Kashkari, who oversaw the US Troubled Asset Recovery Plan launched in the wake of the financial crisis of 2008, said that this such a mechanism will entail ‘different parts of the economy turning back on and maybe turning off again,’ as part of an 18-month plan.
Over the last few weeks, unemployment has skyrocketed in the U.S. as state and municipal officials have forced firms to close their doors in an effort to curb the transmission of the epidemic.
The US has suffered more than 16 million job cuts over the last three weeks-equal to almost 10 percent of the nation’s population.
Kashkari cautioned that “this could be a long rough journey we’ve got ahead of us before either we get to a successful treatment or a vaccine.” “It’s rough for me to see a V-shaped recovery in that situation,” he adds.
The remarks made by Kashkari mirrored signs from President Donald Trump that he needs to restart the economy earlier than expected to curb the bleed. Trump said on Friday that next week, he would introduce a new advisory committee that will concentrate its attention on the economic opening process.
The U.S. central bank has acted vigorously to mitigate the impact of the coronavirus pandemic on the U.S. economy, introducing an unparalleled series of relief measures to fund loans worth as much as $2.3 trillion and cutting interest rates to virtually zero.
Fed Chairman Jerome Powell warned on Thursday that the “alarming pace” recession was shocking, and that unemployment could immediately reach very significant levels.