The head of the Federal Reserve Bank of Minneapolis said Sunday “fear” is a key factor behind a distressing decline in consumer activity that signals a stalling of the economic recovery.
In an interview on CBS News’ “Face The Nation,” Fed member Neel Kashkari said consumers have to feel safe from the coronavirus pandemic that still rages in some parts of the nation.
“Fear is a huge factor,” he said of the indicators that show a slide in consumer sentiment in late July. “You can see that around the world… we are all paying close attention to what’s happening with the virus.“
“Until we have that real confidence, not just wishful thinking, but in the data, real evidence it is safe, we're not going to have a meaningful economic recovery,” he added.
According to Kashkari, a “really hard” lockdown is the best way to get COVID-19 under control and lay the groundwork for true economic recovery.
“If we were to lock down really hard… for a month or six weeks we could get the case count down so that our testing and contact tracing was enough to control it,” Kashkari said.
“If we don’t do that… with flareups and local lockdowns for the next year or two…. we’re going to see many more business bankruptcies… a much slower recovery for all of us,” he warned.
© 2021 Newsmax. All rights reserved.