On Sunday, Neel Kashkari offered a disconcerting take on what he says will be halting efforts to restart the world’s largest economy.
Speaking to CBS’s “Face the Nation”, Kashkari cast considerable doubt on the idea of a “V-shaped” recovery, citing evidence from across the globe, where the coronavirus has resurfaced once containment protocols are relaxed.
“These predictions that the economy is just going turn right back on when people go back to work [are] overly optimistic?”, Margaret Brennan asked, snapping her fingers for effect. “I think so”, Kashkari remarked, adding that it “would be wonderful if some new therapy were developed in the next couple of months… but barring some health care miracle, it seems like we’re going to have various phases of rolling flare ups”.
“Different parts of the economy turning back on, turning back off again”, he continued, cautioning that “this could be a long, hard road we have ahead of us”.
Earlier, Anthony Fauci told CNN it’s possible the US economy could partially reopen starting next month. His comments came less than two days after Donald Trump described the decision on when to lift lockdowns and allow businesses to reopen as the most consequential call he’s ever had to make.
Fauci emphasized that any restart will not be an “all or none” endeavor. “If all of a sudden we decide, ‘OK, it’s May, whatever, and we just turn the switch on, that could be a real problem”, Fauci warned. “I think it could probably start, at least in some ways, maybe next month”, he added, before quickly qualifying the statement. “Don’t hold me to it”.
We won’t, Dr. Fauci. But Donald Trump will.
Nearly 17 million Americans have filed for unemployment benefits over the past three weeks and the number will surely continue to rise.
The good news is, the “curve” continues to flatten in New York, where hospitalizations are falling. And yet, even as daily deaths have stabilized, the state is still losing well more than 700 people per day to the virus.
Projections for US economic output in the second quarter are dire, with most analysts and economists forecasting the sharpest contraction in the history of modern GDP statistics. Some see a sharp bounce in Q3 and Q4, but Kashkari is hardly alone in questioning those assumptions.
“We will get back to a better place [but] it’s just not going to bounce back in a V-shape to January of 2020”, Jeff Gundlach said, in a March 31 webcast. BofA changed its call recently to include a third consecutive quarterly contraction in Q3.
“We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine”, Kashkari went on to say Sunday.
If you ask the notoriously dovish Minneapolis Fed chief, “we should all be focusing on an 18-month strategy for our health care system and our economy”.