Fed’s Clarida: Direct fiscal support key to sustain activity
Federal Reserve Vice Chairman Richard Clarida (pictured) said on Tuesday that the pandemic has taken “a heavy toll” on the economic activity and employment in the United States.
In a speech to the Foreign Policy Association, Clarida said that financial markets are stabilized after the turbulence seen in March but stressed that the easing in financial conditions “may not prove to be durable.” He also noted that direct fiscal support for the economy is key to sustain economic activity and “complement what monetary policy cannot accomplish on its own.”
Clarida noted that the course of recovery depends on the course of the virus, adding that it will take some time before economic activity and labor market fully recovers, with recovery expected in the third quarter.
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