US recovery will be grinding and slow without more stimulus: Federal Reserve's Kashkari
[BENGALURU] The US economic recovery will slow down if unemployed Americans and struggling businesses do not receive more assistance, Minneapolis Federal Reserve President Neel Kashkari said on Thursday.
Without further stimulus, "we will end up having a much slower - what I would call a grinding - recovery," Mr Kashkari said during a virtual discussion organised by New York University Stern Centre for Global Economy and Business.
Lawmakers have yet to reach a deal for further fiscal stimulus, and President Donald Trump has alternated between calling off the negotiations and pushing for larger benefits.
While discussions drag on, Mr Kashkari and other Fed policymakers are drawing attention to the consequences of not rolling out more aid.
Thousands more businesses could fail if they do not get more support, a trend that can also hurt property owners and lenders, Mr Kashkari added.
And the financial pain felt by jobless consumers who are struggling to pay their bills could also spill over to other parts of the economy, Mr Kashkari said.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The Fed is limited in what it can do to help struggling businesses and consumers since it does not have the authority to issue grants or send cash directly to households.
"If you can't pay your bills, more quantitative easing is a poor substitute for extended unemployment insurance," Mr Kashkari said. "Only Congress has the ability to get that direct fiscal aid to the small businesses and to the Americans who have lost their jobs and who are facing real hardship."
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Beijing city to subsidise domestic AI chips, targets self-reliance by 2027
China passes tariff law as tensions with trading partners simmer
Blinken meets Chinese counterpart Wang Yi in Beijing
South Korea’s public finances no longer a credit rating ‘strength’: Fitch
UK consumer confidence improves as inflation and taxes fall
Inflation in Japan’s capital falls below BOJ target, slows for second month