Federal Reserve Bank expects recession but say they're well-positioned to help economy
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The head of the Federal Reserve Bank in Minneapolis expects the United States is headed for a recession, but Neel Kashkari, Minneapolis Federal Reserve Bank's chair says they are well-positioned to help the economy.
Kashkari talked with 5 EYEWITNESS NEWS about the health care and economic crisis. "None of us has ever seen this before," he said. "This is like a hurricane, but it's hitting the entire United States of America."
Kashkari believes small businesses will be hit hard in the weeks and months ahead.
"As this progresses, small businesses are really in a bind," he said. "We know they are going to be feeling a lot of stress. The restaurants, the cafes, the barbershops, the gyms, they're all being shut down for good reason. Governor Walz made a very smart decision to help improve social distancing in Minnesota. But it's the small businesses and their workers that are going to directly feel effects and it's really going to be up to the U.S. Congress and the state legislature to take action to try to reach them to help them get through this period."
Kashkari encourages all Minnesotans to support their neighborhood small businesses.
"We should all do our part in the social distancing. By us staying at home and not interacting in large crowds we can actually help slow the spread of the disease which will give the health care workers time to catch up and get their arms around it. Number two, you know, go get take out. You can get to local restaurants and get take out. We're going to do that in our household to try to help support the local restaurants and local businesses," Kashkari said.
He also says the Fed is ready to help too.
"We are going to do our part. The First responders are the health care workers, the experts, the policy experts. The Fed has a different role to play. Our job is to make sure the financial system keeps running so that money can get out to banks, can get out to businesses that need it. So they should have a lot of confidence that the Fed is doing its part so that we can enable the health care workers to do their part," he added.
Kashkari worked on the frontline during the 2008 global financial crisis.
"This has echoes of that, this is different. This is a health care crisis, not a banking crisis," he said. "But we will get through this. It is going to be highly uncertain for a while and there are going to be real consequences for the American people and the people of Minnesota. We will get through this. We all just need to do our part, and that is listening to the Governor when he says stay home or work from home and don't congregate in large groups. And if we support our small businesses. I think if we can all do our part, we will get through this."