San Francisco Fed President Mary Daly told WSJ that “I don’t expect a sharp V-shaped recovery” in the US economy after the coronavirus pandemic. Instead, she said “I expect something more like negative quarters of growth throughout 2020, and then a gradual return to positive growth in 2021.”
Daly remains “optimistic” that Fed can achieve the dual mandate of full employment and price stability. “But it’s going to take some time”. For now, Fed remains committed to keeping rates at rock-bottom levels until after the coronavirus passes.
Daly’s comment was a big contrast to St. Louis Fed President James Bullard. Bullard said yesterday there is “no reason” the economy can’t come back in a “V-shape” rebound. He added that a robust recovery can happen if it’s “managed appropriately”.
