Fed’s Eric Rosengren says U.S. economy ‘will come back strongly’

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Federal Reserve Bank of Boston Eric Rosengren offered an upbeat assessment in the face of the darkening economic crisis, saying the U.S. can withstand the short-term damage caused by the coronavirus pandemic.

“The U.S. economy will come back strongly at some point,” he said in a telephone interview Thursday with Bloomberg News.

Federal Reserve Bank of Boston Eric Rosengren
Federal Reserve Bank of Boston Eric Rosengren

Rosengren, currently the longest-serving Fed policy maker — he took office in July 2007, just as the global financial crisis was getting under way — acknowledged the coronavirus had delivered a “real economic shock.”

“We’re already seeing initial claims going up, and we’re likely to see many more layoffs over the next couple of weeks as it become clear that firms won’t be able to reopen quickly,” he said. “While that is disturbing, hopefully it is short term, and to the extent that we can continue to have financial markets be resilient, the underlying U.S. economy should be just fine over time.”

The Fed has introduced three emergency lending programs over the past two days to help keep credit markets functioning. That follows its sudden decision on Sunday to slash interest rates to near zero and begin purchasing at least $700 billion in bonds to help bolster the U.S. economy.

Bloomberg News
Monetary policy Economy Federal Reserve FOMC Federal Reserve Bank of Boston Eric Rosengren