Fed Vice Chair Richard Clarida said he forecast the US to have a “rebound in economic activity in the third-quarter data”. However, “the course of the economy is going to depend on the course of the virus, and it’s a complex picture”.
“It will take some time I believe before we get back to the level of activity we were at in February before the pandemic hit,” he added. “My baseline view is that we could get back to the level of activity perhaps towards the end of 2021.”
Also, ‘”there are a lot of moving parts with the virus and the global outlook.” One being additional fiscal support which the Congress and the White House are still struggling to reach an agreement. “The longer this drags on, the greater risk there is to long-term damage to the economy,” Clarida said. “I don’t think we’re at that point yet.”