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It will likely take more than just a few months before the millions of Americans who have lost their jobs on fallout from the coronavirus pandemic will be able to get back to work, San Francisco Federal Reserve Bank President Mary Daly said on Wednesday.
With states reopening in phases, that “by definition translates to a slow recovery as we put toes in the water, see if the virus flares up when we go back to some economic activity,” she said in an interview on the SiriusXm program “Wharton.” “If it doesn’t, we can gain some momentum, people will be more confident; but if it does then people are going to be more cautious and that will slow the recovery even further.
“Whichever scenario occurs, this is going to be a slow recovery and not a sharp rebound,” she said.
The San Francisco Bay Area, where Daly lives, was the first U.S. region to impose stay-at-home orders in mid-March. In recent weeks most states, including most of California, have begun to allow businesses to phase in some reopenings, hoping to bring back to work some of the more than 30 million Americans who have filed for unemployment insurance benefits over the last two months.
Getting people back to work is “a project that will last longer than just a few months,” Daly said. And with the rate of the virus spread controlling how quickly regions will be able to reopen, she said, under most scenarios “the economy is going to need more support, in all likelihood.”
Her remarks echoed those of Fed Chair Jerome Powell who earlier in the day said more fiscal support from the U.S. Congress is likely worth the cost if it helps the economy avoid long-term damage.