Minneapolis Federal Reserve President Neel Kashkari doesn’t have hope that the economy will rebound quickly from the effects of the coronavirus pandemic, according to CNBC.
Kashkari, echoing the concerns of others, such as Dallas Mavericks owner and entrepreneur Mark Cuban, said that while he wished there could be a “V-shaped” recovery, meaning a steep decline followed shortly thereafter by a quick rebound, that just doesn’t seem likely with the lack of a vaccine thus far.
He said the more likely scenario would be periods of flare-ups in which parts of the economy have to shut down periodically to accommodate the virus and prevent more infections until a vaccine is eventually developed.
Cuban’s comments came from the angle of economics, and he said people likely wouldn’t come back spending lots of money, so the recovery could be slower on that front, too.
Kashkari said the $350 billion in emergency stimulus funds passed by Congress last month wouldn’t fill the gaping hole left when most restaurants and retailers were forced to shut down or scale back. He said he is confident more money could be on the way, but he also cautioned that nobody yet knows exactly how long this crisis will last, so it is unknown exactly how much aid will be needed in the long term.
But Kashkari praised the government’s efforts concerning the crisis thus far, with the Fed having recently announced a spate of new programs to lend out a total of $2.3 trillion to businesses and governments impacted by the pandemic.
Kashkari’s cautions are at odds with the opinions of St. Louis Fed President James Bullard, who said last week that he doesn’t think the economy is beyond saving. He said that because the economy was strong before the pandemic, the recovery wouldn’t be as strained as some were speculating.
The unemployment numbers, however, are continuing to rise, with over 6 million new unemployment filings for each of the past two weeks.
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