Recovery Could Take 4 Years If Virus Contained, Fed’s Daly Says – Bloomberg

The U.S. economy can escape another decade-long slog back to health if strong public measures or a vaccine curb virus surges, Federal Reserve Bank of San Francisco President Mary Daly said. “If we can get the public health issues under control either through a really robust mitigation strategy or a vaccine, then we can reengage in economic activity really quickly,” Daly said Wednesday in a virtual Washington Post Live event. “Then it could take just four years or five years. But if we end up with a pervasive, long lasting hit to the economy, then it could take longer.”

The U.S. economy officially entered a recession in February, according to the National Bureau of Economic Research, ending a decade-long recovery from the 2008 financial crisis. Although some of the early heavy-hit areas of the country are now seeing lower rates of the coronavirus, states like Texas and California are witnessing a resurgence after starting to reopen their economies.

Not V-Shaped

Some data indicate that the economy is starting to recover. Retail sales jumped 17.7% in May from the previous month and a gauge of manufacturing rose to the highest level in more than a year. Daly said this doesn’t mean the country will see a “V-shaped” recovery.

“We’ve certainly seen some signs that are positive,” Daly said. “But I would hesitate to call this a recovery. Because ultimately the virus will determine the pace at which we can go.”

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