By Suzanne Cosgrove
CHICAGO (MaceNews) – After a sharp contraction in the first half, it is “reasonable” to expect the US economy to pick up in the second half of 2020, Chicago Federal Reserve Bank President Charles Evans said Tuesday.
In a media conference call, Evans cautioned that he would have to evaluate economic conditions on a “quarter-by-quarter” basis, amid uncertainty about the economic outlook, and worries about a possible second wave of the coronavirus, or additional bankruptcies.
By the end of 2021, a “good” unemployment rate would be 5% to 6%, Evans said, but “that would involve a lot of things going right.”
Evans said manufacturers, small businesses and others he has spoken to are “challenged” as they seek to make workplaces safer and screen employees against COVID-19. Those changes require financial resources, but “unfortunately, we need to do this for some time.”
Different sectors will perform better than others as the recovery unfolds, he said. Travel, for example, will be “nowhere near where it was at pre-crisis levels.”
The decision to relax stay-at-home orders is “bold,” and “with risks, in my opinion,” Evans added. “There are significant challenges ahead.”
Asked about the role of monetary policy in response to the COVID-19 crisis, Evans said the Fed continues to think about the most effective steps to support recovery, including forward guidance and asset purchases. The Fed will continue collaborating with the Treasury, he said.