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The US. recovery has been “muted” by the resurgence of the coronavirus in recent weeks and could mar improvement in the unemployment rate, Dallas Federal Reserve President Robert Kaplan said overnight.

In more cent trade, Kaplan has commented saying that an extension of unemployment benefit is important and that a hard lockdown is not the right answer for the US economy.

“The rebounding continues but with the resurgence that has muted the rebound, it has muted the recovery,” Kaplan said in Webcast remarks overnight to the Lubbock Chamber of Commerce.

He said he thought the unemployment rate could fall to 9% by the end of the year, or even below that, but “it requires adherence to protocols particularly wearing masks…If we don’t follow that, while people may feel freer, the economy will grow slower.”

Market implications

Meanwhile, risk appetite recovered on Wednesday, with North American stocks making up for Tuesday’s losses as the S&P 500 tested the all-time closing highs, despite no signs of progress in stimulus talks in Congress.