Coronavirus spurs calls for U.S. Federal Reserve to cut interest rates
The US economy could benefit if the country “did indeed impose a tight quarantine” for four to six weeks, a senior Fed official said, adding that Congress could well afford large sums of money for measures to contain the coronavirus pandemic..
The economy, which suffered the worst damage since the Great Depression in the second quarter, will be able to recover quickly, but only if the coronavirus is under control, said in an interview with CBS. Neil Kashkari, President of the Federal Reserve Bank of Minneapolis.
«If we don’t, and we have this terrible virus spreading throughout the country with exacerbations and local quarantine measures over the next year or two, it is quite possible that we will see many more business bankruptcies.», – said Kashkari.
He said Congress could spend large sums of money to counter the spread of the coronavirus pandemic because the country’s budget deficit could be financed without the use of foreign borrowing..
«Those of us who are fortunate enough to keep our jobs save a lot more money because we don’t go to restaurants, movie theaters, or on vacation.», – considers Kashkari.
«What this actually means is that we, as a country, have much more resources to support those who have been fired.», – he said.
The Democratic-led U.S. House of Representatives approved a $ 3 trillion bailout bill in May, while Senate Republicans, many of whom have raised concerns about the increase in debt, opposed a $ 1 trillion bailout package last week..
Efforts to find a compromise seem to be deadlocked.
U.S. Treasury Secretary Stephen Mnuchin in an interview said that the president Donald Trump ready to spend all the necessary funds, but the shortage is one of the important factors.
«Obviously, there is a need to support workers and support the economy, ”he said. – On the other hand, we must be careful not to accumulate huge amounts of debt for future generations».
Kashkari takes a different view, pointing to both high domestic savings and historically low interest rates..
«I’m not worried about that, ”he said. – Congress should use this opportunity to support the American people and the American economy».
«If we develop the economy, we can pay off debts», – added Kashkari.