Top Fed Official Says Policy Response Could Speed Faster Recovery
By Nick Timiraos
A top Federal Reserve official said Monday the U.S. economy
could stage a faster recovery from the coronavirus-induced
recession than it did following the 2008 global financial
Fed Vice Chairman Richard Clarida said it is possible that the
recession that began in March already has ended, though it could
take another year before broad measures of economic output fully
recover to their pre-pandemic levels.
In remarks delivered virtually at a banking-industry conference,
Mr. Clarida said the strong rebound in part reflected aggressive
actions by policy makers at the Fed, in Congress and the White
House to maintain access to credit and to provide relief to
households and businesses.
"Additional support from monetary -- and likely fiscal -- policy
will be needed," Mr. Clarida said.
He didn't go into specifics about what steps the Fed might take
after it last month made more explicit its plans to hold interest
rates for lower than it has done in past economic downturns. Most
officials in projections last month indicated they expect to hold
rates near zero for at least three years. The Fed isn't anticipated
to take new policy action at its next meeting on Nov. 4-5.
Mr. Clarida said the path of the recovery going forward will be
shaped in part by the course of the virus, social-distancing
responses and other mitigation efforts. The recovery in economic
data that followed efforts in March and April to suppress the virus
by reducing commercial activity had been "surprisingly strong," he
This development was "especially noteworthy when set in relief
against the surge in new [virus] cases that were reported this
summer and the coincident flatlining in a number of high-frequency
activity indicators that we follow to track the effect of the virus
on economic activity," he said.
(END) Dow Jones Newswires
October 19, 2020 11:59 ET (15:59 GMT)
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