Neel Kashkari has some bad news for America.
Things are going to get worse on the economic front, and demonstrably so.
Of course, this isn’t “news” to market participants or economists, but the reminder – delivered on ABC Sunday – is bad publicity for the Trump administration following the worst jobs report in US history.
Asked by George Stephanopoulos whether Larry Kudlow’s projections for a rapid recovery in the back half of 2020 and a “roaring” 2021 are “realistic”, Kashkari was dubious.
“You know, I wish it were, but what I’ve learned in the last two months is that this is more likely to be a slow, gradual recovery”, he sighed. “The virus continues to spread. People continue to get it. Unfortunately, people are tragically dying.”
Yes, they are.
It was a blunt assessment, to be sure, but one which is arguably more closely aligned to reality than that espoused by the “V” shaped contingent.
Neel wasn’t done. “If we see a lot of small businesses go through bankruptcy… you’re going to have empty strip malls for a while until new businesses form”, he went on to say, before noting that it’s all about confidence.
By “confidence”, Kashkari means that while there may be an initial bump when some businesses reopen due to pent up demand for things like haircuts, until there’s a vaccine or another medical breakthrough, a sustained pickup in economic activity could be indefinitely forestalled.
As far as the numbers we got on Friday are concerned, Neel didn’t mince words.
“[The unemployment rate] is really around 23, 24% of people who are out of work today, and if this is a gradual recovery the way I think it’s going to be, those folks are going to need more help”, he said.
We’re gonna need a bigger bailout, folks.