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Reuters reports San Francisco Federal Reserve Bank President Mary Daly saying on Wednesday that the enhanced unemployment benefits provided to jobless Americans helped to offset the negative demand shock caused by the virus and there is little evidence the payments deterred people from seeking new work,

The Fed official also said the economic recovery will be slow and gradual, depending on the virus, and that she is not expecting a V-shaped recovery.

Any policies that can encourage consumers to keep spending during the downturn will help the recovery, Daly said during a virtual event organized by the Economic Club of Las Vegas.

key notes

  • Fed’s Daly says COVID is going to accelerate workplace trends and leave some workers without the right skills.
  • Says as we get control of the virus we need to continue to provide support to get Americans back to work.
  • Says there is very little evidence that extra unemployment benefits are deterring people from going back to work.
  • Says to the extent that we can have families continue to spend it offsets negative demand shock of virus.
  • Says Fed is making purchases in corporate bond market because businesses need liquidity.
  • Says Fed is committed to reaching 2% inflation target and she has confidence they will reach it in the future.