The US economic growth will hasten in 2021 as the country recovers from the coronavirus pandemic, Dallas Federal Reserve President Robert Kaplan says.
“In ’21, we will see an above-trend growth, and we will continue to grind down the unemployment rate,” Kaplan said during an interview on CNBC’s “Closing Bell.” “I still believe if we follow these protocols, we would see a rebound from the deep hole we dug in the second quarter.
“The question is when you get to a normalized economy, and it’s going to depend on the path of the virus and how well we manage it, and the timing of the vaccine,” Kaplan added. “I’m optimistic we will work our way through this. But it would be a lot less costly if we did a good job managing the virus.”
Kaplan emphasized the importance of wearing masks for the US economic growth. Several states in the US have recorded a resurgence in new coronavirus cases and hospitalizations as economies gradually reopened.
Kaplan predicts a contraction of 4.5% or 5% in the US economy this year as the coronavirus lead to unforeseen disruptions.
To shore up the economy, the Fed has designed emergency programs that could produce trillion dollars in liquidity and lending, while reducing its key interest rates to zero. Kaplan was asked if the central bank could do more to aid the economy. He mentioned its substantial capacity but reiterated the importance of stopping the spread of the virus as the priority for the country right now.
“If we do an outstanding job and a better job managing the virus, we will not need to do as much. That would be better for the country if we didn’t have to,” Kaplan said.
In May, Jerome Powell, chairman of Federal Reserve, said that the economy of the US will slowly recover from the current downturn. However, the country needs a coronavirus vaccine before a full recovery.
“In the long run and even in the medium run, you wouldn’t want to bet against the American economy. The American economy will recover,” Powell said on CBS’ “60 Minutes.”
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of the year,” the Federal Reserve chairman said.
However, Powell noted that “for the economy to fully recover … that may have to await the arrival of a vaccine.”
"Real change"
World Economic Founder (WEF) founder says the coronavirus pandemic should lead to real change and address the deepest problems of society to avoid conflicts and revolutions.
Professor Klaus Schwab, founder of WEF or World Economic Forum, co-wrote a book with French author Thierry Malleret titled “Covid-19: The Great Reset.”
They discuss the state of the post-coronavirus world barely four months after the coronavirus pandemic was declared.
They explain that the global health crisis has “magnified the fault lines that already beset our economies and societies.” They cited several surveys suggesting that many people “collectively desire change.”
The authors believe that the massive outrage following the murder of George Floyd in the hands of the police as well as the Black Lives Matter movement mirror the “urgent necessity” to arrive at a so-called “Great Reset.”
