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Reopening the U.S. economy should be handled cautiously to avoid a second lockdown, said Cleveland Fed President Loretta Mester on Friday.
“There’s a possibility of opening up in the second half of the year, but it has to be done in a very, very careful way to avoid having to go backwards because that would be a devastating outcome,” Mester said, in an interview on the Wharton Business Daily radio program.
In a separate interview, top White House economist Larry Kudlow said government health experts were doing contingency planning for a possible second wave.
But Kudlow said a member of the White House coronavirus task force told him the country wouldn’t have to shut down a second time because of the lessons learned since early March and the country is “better equipped.”
“When we do reopen that is going to give this economy a tremendous boost,” he said.
Mester said the federal government and the central bank have to be ready to do more to help the economy.
“If you think of this as building a bridge, as the shutdown has gone on longer than people expected at the beginning, the bridge has to be longer. It also has to be wider because more households and more businesses are under stress,” the Cleveland Fed president said.
U.S. equity benchmarks continued to reflect improved sentiment about the end of the coronavirus lockdown. The Dow Jones Industrial Average DJIA, +1.51% was up 300 points to 24,159 in mid-morning trading Friday. The index is up almost 30% from its March low.
