The U.S. economy could start to recover in the second half of the year after what is shaping up to be the worst recession in decades, but growth is likely to be slow and uneven, several top Federal Reserve policymakers indicated on Tuesday.
"We're living through the most severe contraction in activity and surge in unemployment that we've seen in our lifetimes," Federal Reserve Vice Chair Richard Clarida said in an interview with CNBC."Unfortunately, the unemployment rate is going to surge to numbers that we've not seen probably since the 1940s."
"There are lots of different possibilities," Atlanta Fed President Raphael Bostic said of the shape of any recovery, noting that in the first instance it hinges on stabilizing the rate of infections."In many communities the 'V' recovery is going to be very difficult to achieve," Bostic said, referring to a scenario with a swift economic rebound.
U.S. Vice President Mike Pence, meanwhile, said on Tuesday the White House could disband its coronavirus task force by month's end.Chicago Federal Reserve Bank President Charles Evans said it is"reasonable" to expect a return to economic growth in the second half of the year, but that such an outcome is only slightly more likely than other, more pessimistic scenarios.
If all goes well, he said, unemployment could drop to 5per cent by the end of next year. A slower decline in the jobless rate could mean longer-lasting damage to the economy, Evan said.
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