WASHINGTON/SAN FRANCISCO, 14 apr (Reuters) – Authorities of the Federal Reserve began to grapple with the complexities of how to reopen the country’s economy and simultaneously protect the population from the resurgence of the infections by coronaviruses, goals that they cannot succeed separately.
PHOTO FILE: James Bullard, president of the Federal Reserve Bank of St. Louis, left a conference in Jackson Hole, Wyoming, united States. August 23, 2019. REUTERS/Jonathan Crosby
The elected leaders, from president Donald Trump to the state governors, different approaches have been adopted and, sometimes, found in its response to the health crisis and the debate emerging on how and when to re-open the economy, which has led to a series of attitudes, policies and approaches rather than a coordinated national response.
In appearances separately on Tuesday, the heads of central banks of the Fed are involved in the issue, asking for evidence is almost universal, a fiscal support increased for businesses, families and local governments, and raising concerns that some states are ready to restart their economies before others have seen the peak of the virus.
A group of coastal states that have imposed some of the stricter rules of social distancing to slow the virus have established working groups to plan a re-opening now that the cases may be reaching its peak. Other states, which are slower to block their economies, they can be late.
The president of the Fed of Atlanta, Raphael Bostic, said in an interview with Yahoo Finance that in all the southern States of the U.s. “there is a lot of variation in terms of how strict they have been confinements”.
In general, the economy may be growing again at the end of the summer, but “I try to see all the markets in my district to better understand how it’s going to be this path, and if the peaks will arrive in advance, so that we can reach the end of this before. If this extends in some parts we will have to wait longer,” said Bostic.
The Fed launched programs unpublished and emergency in the last few weeks to keep interest rates low and credit flowing to practically all parts of the economy, agreeing to finance the purchase of assets such as corporate bonds, which traditionally has been avoided, and assume risks of credit, direct loans to smaller companies.
But it is possible that the work is not yet complete: the officials have said in recent days that they were prepared to do more if other markets of financial loans, commercial or corporate in need of help.
But the frame are in great middle already established, and this week the authorities of the Fed focused its attention on how to re-start a machine $ 22 billion.
Although the period April-June you will see a huge economic slowdown, the head of the Fed of St. Louis, James Bullard, said that the united States cannot pay indefinitely 25,000 million dollars per day that estimated that the confinement current costs in terms of loss of production.
But any reopening should be done safely, with a national plan of risk management, told the Chamber of Commerce of St. Louis in a discussion webcast.
The reboot will not come because politicians declare it, he said, but that as households and firms find ways to resume daily life, “knowing that this disease is there.” Tests for generalized or other forms of mitigating the risk, even business by business, or school by school, would be key, said Bullard.
Meanwhile, the president of Edf of Chicago, Charles Evans, said that any protocol that is decided you need to guard against the resurgence of the virus and the necessity of resorting again to a broad social distancing.
“If we try to reopen the business too soon, and then we have another wave (…) then it will be much more prolonged recession and could be very costly,” he said. If that means keeping the economy closed for more time, said, then the authorities of the country must prepare a network security even more durable.
Report Howard Schneider, Published in Spanish by Manuel Farias