Cleveland Fed President Loretta Mester said in a speech that “the increase in virus cases that we’ve seen in recent weeks has raised the downside risks to the outlook and is a stark reminder that there are several different scenarios that could play out”. The reopening phase maybe “more protracted than many had anticipated when it started”.

It’s “clear that more fiscal support is needed to provide a bridge for households, small businesses, and state and local municipalities that have borne the brunt of the economic shutdown until the recovery is sustainably in place”, she added.

On Fed’s side, even though policy rate is “already at its effective lower bound”, there are tools to provide additional accommodations, including “forward guidance about the future path of policy and purchases of longer-term Treasuries and agency mortgage-backed securities”.

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Mester’s full speech here.

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