In statements over the last 48 hours, the heads of the Boston, San Francisco and Dallas Federal Reserve banks all blamed the U.S. economy’s stall-out on the country’s premature reopening of businesses that were shut due to the pandemic. For example, Boston Fed President Eric Rosengren said during an online event organized by the South Shore Chamber of Commerce in Massachusetts, that “The forecast for the U.S. economy this fall is quite uncertain, but my view is that the recent slowdown in economic activity that we have seen in high-frequency data is likely to continue.” San Francisco Fed president Mary Daly, in a webcast discussion with the Economic Club of Las Vegas, said the economic rebound will be slow and gradual. And Dallas Fed President Robert Kaplan told a Lubbock Chamber of Commerce in Texas webcast that Americans need to learn to “live with” the virus, so that the economy can be reopened.
Rosengren was most explicit in criticizing the U.S. COVID-19 policy. He said that parts of Europe handled things better, by shutting their economies down long enough to significantly lower infection rates and deaths. Many states in the U.S., on the other hand, lifted restrictions too quickly, resulting in new coronavirus outbreaks and the need to shut their economies down again. “Limited or inconsistent efforts by states to control the virus based on public health guidance are not only placing citizens at unnecessary risk of severe illness and possible death – but are also likely to prolong the economic downturn,” Rosengren said.
