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Fed's Kashkari lays out case for 'really hard' lockdown

By Alexander Bueso

Date: Monday 03 Aug 2020

Fed's Kashkari lays out case for 'really hard' lockdown

(Sharecast News) - A top US Federal Reserve official made the case at the weekend for a "really hard" four-to-six week lockdown to suppress the novel coronavirus pandemic, adding that Congress had more than enough wherewithal to finance relief efforts.
In an interview with broadcaster CBS on Sunday, Neel Kashkari said the economy would only be able to mount a "robust" recovery if the virus was brought under control.

"If we don't do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we're going to see many, many more business bankruptcies," he said.

"That's going to be a much slower recovery for all of us."

The head of the Federal Reserve Bank of Minneapolis also argued that Congress had room to boost fiscal spending because Americans were saving so much in the wake of the pandemic and thanks to low interest rates.

"I'm not worried about it," he said.

"Congress should use this opportunity to support the American people and the American economy.

"If we get the economy growing, we will be able to pay off the debt."

US Treasury Secretary, Steve Mnuchin, was less certain.

Also on Sunday, Mnuchin said in an interview on ABC's 'This Week' programme that: "There's obviously a need to support workers and support the economy.

"On the other hand, we have to be careful about not piling on enormous amount of debts for future generations."

In May, Democrats in the House of Representatives had approved a fourth stimulus package worth $3.0trn, with Republicans in the Senate having passed a proposal during the previous week for a $1.0trn package.

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