Richmond Fed President Thomas Barkin said the “pothole” in the economy created by the coronavirus pandemic has turned into a “sinkhole”. He urged Congress to keep support in place or businesses and consumers will “feel the full brunt”.
“Four months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate,” he said. “Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate”.
He warned, “quickly pulling away the support that consumers and businesses are receiving would be a pretty traumatic move for what’s happening in the economy.” “If Congress takes support away too abruptly … the unemployed, their landlords, the places they shop will then feel the full brunt.”