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Philadelphia, PA — Patrick T. Harker, president and CEO of the Federal Reserve Bank of Philadelphia, told an audience at the Chicago Council on Global Affairs that he foresees two possible paths for the U.S. economy, depending on how measures to mitigate the spread of COVID-19 play out. Harker addressed the council via Zoom.
Harker said that if the U.S. economy reopens in June with smart measures to stop the spread of the virus in place, he expects the sharp contraction this quarter to be followed by robust growth in the second half of the year. We would then see very healthy growth in 2021. But Harker warned that if the economy reopens without effective mitigation measures and the U.S. experiences a significant second wave of the virus, the economy could severely contract again in 2021.
Harker, who is a voting member of the Federal Open Market Committee this year, also laid out the actions the Federal Reserve has taken to mitigate the economic fallout from the crisis, including lowering the bank’s policy interest rate to near zero and setting up lending facilities for municipalities and small businesses.