Federal Reserve leaders say the economy needs more help
Two regional Federal Reserve bank presidents said this week that they see the economic recovery "leveling off," and that the U.S. economy is in need of more help from policymakers.
Atlanta Fed Bank President Raphael Bostic said that the recovery is in danger of stalling due to the recent spike in virus cases across the country, and that recent data shows a "leveling off" of economic activity both in terms of business openings and mobility.
“There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise,” Bostic said.
Cleveland Fed Bank President Loretta Mester said activity is slowing in her region due to rising virus cases, and she said more policy help is necessary to usher the economy through the pandemic.
“We saw a reopening in May and activity starting to come back pretty well. Over the past week or so, there’s been some leveling off, and I think it’s probably due to the increase in cases not only in Ohio but across the country,” Mester said.
Along with the Fed continuing with low rates and lending and liquidity programs, Mester said that Congress also likely will need to continue its support of businesses and individuals who need money to get through an economic slump that became a recession in February.
“If we don’t get further fiscal support, things won’t come back as well as they could,” she said. “This is a period where we need to be supporting both individuals and businesses who, but for the virus and pandemic, would have been healthy, to get them through this period so we can then have a more grounded recovery and try to get back to where we were in February.”