Fed Signals Rising Caution On US Recovery

NEW YORK/WASHINGTON (Reuters) – Two US Federal Reserve officials sounded increasing pessimism on Friday on the swiftness of any economic recovery from the coronavirus epidemic and warned the unemployment rate could rise again if the disease is not brought under control.

The central bank already made clear it expects a full economic healing from the impact of the virus to take years as it kept interest rate near zero at its policy meeting last week.

But nascent signs of recovery in US economic data, with better-than-expected job gains and retail sales for the month of May, had fueled some hopes that the US could bounce back more quickly.

Fed officials pushed back on that view on Friday and cautioned against reopening the economy too hastily after the end of state lockdowns aimed at containing the virus, which has killed more than 118,000 Americans.

California, North Carolina and a string of US cities mandated or urged mandatory use of masks on Thursday to get a grip on spiraling coronavirus cases as at least six states set daily records.