Fed’s Kashkari: US economy faces 'long, hard road' to recover from coronavirus

Early Monday morning in Asia, Reuters came out with the downbeat comments from the Minneapolis Federal Reserve Bank President Neel Kashkari. The Fed policymaker crossed wires while appearing on CBS’s “Face the Nation”.

Key quotes

This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine.

It’s hard for me to see a V-shaped recovery under that scenario.

We could have these waves of flare-ups, controls, flare-ups and controls until we actually get a therapy or a vaccine.

Public health experts have warned that the U.S. death toll could surge to 200,000 over the summer, from 21,300 on Sunday, if unprecedented stay-at-home orders that have closed businesses and kept most Americans indoors are lifted when they expire at the end of the month.

Kashkari said additional support was needed for small businesses beyond the $350 billion provided in the coronavirus aid package passed in March, but he was optimistic that Congress would approve more funding.

He added that he was looking toward an 18-month strategy to address the health and economic effects of the pandemic. During that time, certain parts of the economy may close and re-open on a rolling basis, starting with workers who are at lowest risk of infection.

FX implications

Dull markets, due to the Easter Monday, restrict the news implications while fears concerning the coronavirus (COVID-19) outbreak in the US keep weighing on the US dollar. Even so, the USD/JPY pair, mostly known as the risk gauge, seesaws around 108.50 by the press time.