Fed’s Kashkari Says Worst Is Yet to Come, Congress Must Step Up
- FOMC voter says virus impact may linger for year or two
- Real jobless rate in U.S. is already as high as 24%, he says
Americans should brace for even more gut-wrenching news on unemployment amid the coronavirus pandemic, and Congress should consider providing more help, said Federal Reserve Bank of Minneapolis President Neel Kashkari.
“The worst is yet to come on the job front, unfortunately,” he said Sunday on ABC’s “This Week,” describing the situation after data on Friday showed the U.S. unemployment surging to 14.7% in April as employers cut an unprecedented 20.5 million jobs.
“It’s really around 23, 24% of people who are out of work today, and if this is a gradual recovery the way I think it’s going to be, those folks are going to need more help,” he said.
The Fed has slashed interest rates to nearly zero and unveiled a raft of emergency lending programs to keep credit flowing in the economy, backed by taxpayer money from a $2 trillion virus rescue package approved by Congress in late March.
Kashkari, who votes on monetary policy this year, said the central bank would do everything in its power to ensure the financial system continues to run, but that fiscal efforts will be needed to help tens of millions of unemployed workers through what is likely to be a lengthy recovery.
“If this is going to go on for a long period of time –- I think it’s going to go on in some phases for a year or two –- I think Congress is going to need to continue to give assistance to workers who’ve lost their jobs,” he said.
By Alister Bull