The president of the Federal Reserve Bank of Minneapolis believes an economic recovery will take some time.
Neel Kashkari said there are a lot of unknowns about the coronavirus, and efforts to control it will determine how fast the economy can re-open.
Kashkari held an on-line conference with North Dakota business leaders Thursday. It was sponsored by the North Dakota Department of Commerce and the Greater North Dakota Chamber.
Kashkari said this has been an “unprecedented shutdown of the US economy,” and said it has been devastating for millions of Americans. He said recovery is dependent on the virus, and when vaccines and treatments will become available.
"That doesn't exist today," Kashkari said. "A lot of health experts say an effective vaccine or an effective therapy could be a year or two or more away."
Kashkari said the Paycheck Protection Plan was established to be a bridge for small businesses, to help keep them going, and help employees keep their jobs, until the economy starts to reopen. He said North Dakota businesses have been smart to take advantage of the program. But he also said it’s prudent to prepare for a longer term slowdown.
"On the one hand, you can't just simply go back to normal, because you could get overwhelmed by the virus," Kashkari said. "On the other hand, you can't simply lock down the economy for a couple of years."
Kashkari said he expects it will be a targeted reopening of the economy.
"Not so much on a geographic basis, but on a business-by-business basis," Kashkari said.
Kashkari said for the long-term, he’s bullish on the economy. He said the US economy is resilient, and innovative. Kashkari said a lot of innovation has taken place in North Dakota, especially in the energy sector.
"I know the energy sector is facing extraordinary pressure right now," Kashkari said. "But they built their industry based on innovation. And we're not going to forget how to do all the smart things they figured out how to do."
Kashkari said he's confdent the economy will get through this.
"It may be a rocky journey until we get to recovery," Kashkari said.