Cleveland Federal Reserve President Loretta Mester said activity is slowing in her region due to rising coronavirus cases, and she sees more policy help necessary to help the economy through the pandemic.
Speaking to CNBC in a live interview Tuesday, the central bank official echoed comments from her Atlanta counterpart, Raphael Bostic, who also said he sees a rougher road to recovery.
“I think we’re seeing the same thing,” Mester said on “Closing Bell.” “We saw a reopening in May and activity starting to come back pretty well. Over the past week or so, there’s been some leveling off, and I think it’s probably due to the increase in cases not only in Ohio but across the country.”
The U.S. has seen nearly 3 million coronavirus infections and almost 123,000 deaths, according to the Covid Tracking Project. Deaths and hospitalizations have slowed across much of the country, but the aggregate rise in cases, particularly among younger segments, has slowed economic reopenings in multiple states.
In Ohio, the cases have been rising — up 805 in total or 1.4% on Monday, below the national pace but still enough to raise concern.
Mester said the difficulty in taming the virus is reflected in how long it’s going to take the economy to stage a significant recovery.
“I think it’s going to be a long road back to where we were in February,” she said. “That’s why the Fed has been saying we’re here with our tools and we anticipate having very accommodative monetary policy for quite some time in the future, because it’s just going to take a long time to work through this.”
Along with the Fed continuing with low rates and lending and liquidity programs, Mester said that Congress also likely will need to continue its support of businesses and individuals who need money to get through an economic slump that became a recession in February.
“If we don’t get further fiscal support, things won’t come back as well as they could,” she said. “This is a period where we need to be supporting both individuals and businesses who, but for the virus and pandemic, would have been healthy, to get them through this period so we can then have a more grounded recovery and try to get back to where we were in February.”
Mester’s comments came during a volley of Fed officials’ appearances that saw mostly tepid assessments of where economic growth stands nearly four months after stay-at-home orders took effect.
In addition to Bostic’s cautionary tone, San Francisco Fed President Mary Daly warned about potential dangers in the commercial real estate market and said the unemployment problem will be exacerbated by technology taking jobs from workers displaced during the pandemic.
“My view of the labor market is it’s in better shape than I thought it might be when we started the shelter in place, but it’s nowhere close to where we need it to be if we’re going to achieve our mandated goal of full employment,” she said.