US Federal Reserve Chairpersons "Economic Recovery Slowed by Wrong Government Response"... Emphasize Increased Spending

High Unemployment Due to Failure to Contain COVID-19 - Concerns Over Continued Consumer Slump
'Active Measures Like Wearing Masks Needed to Prevent COVID Spread for Economic Recovery' Emphasized

Eric Rosengren, President of the Federal Reserve Bank of Boston [Photo by Reuters]

[Asia Economy Reporter Jeong Hyunjin] Presidents of the U.S. Federal Reserve Banks have consecutively pointed out that the government's incorrect response to the novel coronavirus infection (COVID-19) has slowed economic recovery. They emphasized the need to expand government spending for economic stimulus, stating that hastily resuming economic activities instead of suppressing COVID-19 caused adverse effects.

According to Bloomberg News on the 12th (local time), Eric Rosengren, President of the Federal Reserve Bank of Boston, attending an event held at the Massachusetts Chamber of Commerce, pointed out, "The nation's limited and inconsistent efforts to suppress the spread of COVID-19 based on public health standards not only exposed citizens to unnecessary risks of severe illness and death but also prolonged the economic recession."

President Rosengren said, "Even if regulations are officially eased, many people will prefer to continue avoiding activities that require social interaction to protect their health," adding, "If this behavior pattern becomes entrenched, the economic recovery momentum to quickly return to full employment will disappear."

Referring to some U.S. states failing to contain the spread of COVID-19, President Rosengren analyzed that in Europe, many countries implemented strong lockdown measures, resulting in a sharp economic downturn but a faster and stronger recovery. He added, "As a result of successful virus suppression policies, Europeans' visits to retail and recreation-related places have currently recovered more compared to Americans."

President Rosengren predicted that the unemployment rate decline would also slow for the time being, noting that in some states, the rapid lifting of economic lockdowns in May has worsened public health conditions. The unemployment rate stood at 10.2% as of July. Considering this, President Rosengren emphasized the need for strong government fiscal policies.

On the same day, Mary Daly, President of the San Francisco Federal Reserve Bank, also diagnosed in a conference call with reporters that the COVID-19 situation has prolonged longer than expected, necessitating an expansion of economic stimulus measures. She said, "Congress needs to build a bigger bridge," adding, "We have now realized that COVID-19 has not passed but is lasting longer than we hoped."

In particular, President Daly mentioned the end of the $600 weekly unemployment benefit payment last month, stating, "It will create holes in consumer demand and consumption," and noted evidence that consumers are using the unemployment benefits they actually received from the government to pay rent or purchase groceries and daily necessities. She emphasized that injecting additional stabilization funds into state governments and local authorities is crucial to prevent contraction in the service industry and reduction in public jobs.

Robert Kaplan, President of the Dallas Federal Reserve Bank, also participated in an online event hosted by the Lubbock Chamber of Commerce in Texas, mentioning that Americans need to find ways to coexist with COVID-19 by utilizing safety measures such as wearing masks to maintain economic activities.

President Kaplan expects the sharply increased U.S. unemployment rate to remain until the end of this year but believes it could decrease if businesses and consumers take measures to prevent the spread of COVID-19. He emphasized, "If people do not follow these and feel more freedom, the pace of economic recovery will be slow."

This content was produced with the assistance of AI translation services.