Reuters
- Minneapolis Federal Reserve President Neel Kashkari told CBS “Face the Nation” on Sunday the recovery from the pandemic is stalling and called for more for fiscal aid.
- He said: “If 11 million Americans can’t pay their bills, can’t put food on the table, can’t make their credit card payments, their car payments, that has spillover effects to other sectors of the economy.”
- Democrats rejected an increased offer of $1.8 trillion in fiscal aid by the White House over the weekend.
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Minneapolis Federal Reserve President Neel Kashkari told CBS’s “Face the Nation” on Sunday the strong recovery seen in the US economy in recent months has “flattened” out and called on lawmakers in Washington to reach an agreement on another round fiscal aid.
“The recovery, the strong recovery that we saw in June and July, has really flattened out. The virus is climbing now again around the country, especially here in my region, in Minnesota, the Dakotas, Wisconsin,” Kashkari said. “And so you’re seeing consumers pull back and not want to go out, and not want to take that risk again. And so, unfortunately, we still have a long way to go in this pandemic, and that means we need continued assistance.”
He said job losses and bankruptcies in the travel and tourism industries, front-line service industries and restaurants will continue to spiral and “bleed on” if lawmakers don’t reach a compromise. Democrats and Republicans have been caught in a stalemate since July over the size and scope of a new set of economic stimulus measures.
“If 11 million Americans can’t pay their bills, can’t put food on the table, can’t make their credit card payments, their car payments, that has spillover effects to other sectors of the economy,” Kashkari said. “The reason the economy bounced back as strongly as it did in June and July is because Congress was so aggressive in the spring. We need Congress to continue to be aggressive so that the recovery can be stronger.”
Kashkari is one of the more dovish members of the Federal Open Market Committee, which sets US monetary policy.
House Speaker Nancy Pelosi rejected President Donald Trump's latest proposal, essentially a stripped-down version of the coronavirus relief bill, calling it "grossly inadequate" over the weekend.
Trump's team proposed a $1.8 trillion stimulus package, which includes a $400 boost in weekly unemployment insurance, $1,200 stimulus checks for US adults, and $1,000 checks for every child.
Kashkari said last week unlike the 2008 financial crisis, the pandemic did not pose a "moral hazard" in which public money couldn't be used to support hard-hit industries.