Despite being in a recession, Kansas City Federal Reserve President Esther George said the economy is beginning to show "signs of life."
During an interview with Fox Business, George said she thinks the "economy will continue to grow."
She predicts there will be a rebound after a historic drop in GDP growth in the second quarter of about 32.9%, according to the Bureau of Economic Analysis. She also forecasts that unemployment will go into high single digits by the end of the year.
"I think for now, what we are seeing is signs of life," she told Edward Lawrence. "We are beginning to see the economy come back online. But, of course, that's tentative at this stage. And so we're going to need more time. And importantly, we're going to need to know really the path of the virus and resolution to that before we can really make firm assessments about where the economy is headed."
Despite her positive outlook, George warned that the recession could get worse if the coronavirus pandemic surges again in the fall.
"An important risk to that outlook is thinking about what happens as we come into the fall, whether we see any resurgence in the virus that would cause an additional pullback in the economy," she told CNBC's "Squawk Box." "We'll monitor that carefully to see whether that plays out."
She spoke to CNBC's Steve Liesman from a virtual version of the Fed's annual symposium in Jackson Hole, Wyoming, which the Kansas City Fed hosts.
George did not indicate that the Fed has any plans to take additional action to help with the economy. The Fed has already cut short-term borrowing rates to near zero and implemented multiple lending and liquidity programs.
"Financial conditions are very accommodative. We have low rates, we still have capacity in those credit facilities," George said. "So I think it's too soon to try to speculate on whatever else might be needed, other than to say the Federal Reserve is going to be very vigilant on that and be prepared to respond if they would have to."
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