Fed Officials Explore Ways To Reopen US

U.S. Federal Reserve officials are facing a two pronged problem, Reuters reported: How do they reopen the economy while also making sure the coronavirus doesn’t have a second spike in infections later in the year?

Opinions on how to allow people to go back to work and relax lockdown guidelines have varied, with President Donald Trump, state officials and medical officials chiming in with mixed lengths and strategies over the past few weeks. This has had the effect of creating a void instead of a coordinated nation-wide response.

A collection of U.S. Federal Reserve presidents weighed in separately this week, saying testing needed to be more widespread than it currently is. They warned that, although some states may be more ready to reopen, others might not have hit the peak of viral infections yet. The difference could come down to discrepancies in the social distancing rules imposed by different states. States that have been slower to enact lockdowns could suffer more.

The Fed has been introducing a number of new measures to keep interest rates low and credit flowing to various parts of the economy. The institution has broken rules it normally wouldn’t, agreeing to finance purchases of corporate assets and take loans to help small businesses.

And in the coming weeks, even more could be necessary for other institutions or areas of the economy, Fed officials said.

But the process of moving on is starting, as Richmond Fed President Thomas Barkin said, noting that he’d already seen numerous businesses and institutions beginning to navigate the new post-COVID-19 landscape, including measures to integrate social distancing expectations and health concerns once things begin reopening.

St. Louis Fed president James Bullard said the U.S. economy simply won’t be able to afford the costs of the shutdown, which could round out to $25 billion per day. He said the process of reopening would not come from one shouted mandate from a high-up elected official, but instead from families collectively being able to start daily life knowing the virus is out there.

Bullard noted that widespread testing would be needed to ensure normalcy could even be approached.