Dallas Fed President Robert Kaplan said expected the economy to shrink about -2.5% this year, which is among the most bullish forecasts by Fed’s policymakers. Though, he noted the recession has hit some sectors and some groups of people worse than others. “It will take more than just a vaccine to revive depressed industries”.
The “number one economic policy, more than fiscal or monetary policy, is mask-wearing,” he said. “If there is no fiscal stimulus, mask-wearing, following health protocols will be even more important.”
Also, he’s “skeptical about the benefits of doing more” QE. “The bond-buying needs to curtail, the Fed balance sheet growth needs to curtail” when the pandemic crisis passes. Also, it’s not “healthy” for the markets to be “addicted, or too reliant” on Fed.
