Federal Reserve President Says Coronavirus Pandemic Needs an '18-Month Strategy' for Healthcare and Economy

Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said that the government should have an "18-month strategy" to respond to the needs of the healthcare sector and the economy amid the coronavirus pandemic, saying he doesn't expect life to return fully to normal until an effective vaccine or therapy is discovered.

Kashkari made the remark during a Sunday interview with CBS News' Face the Nation. He also predicted that the economic recovery from the pandemic would not be swift, while also saying that it's unclear when new unemployment claims will reach a plateau.

"We could have these waves of flare ups, controls, flare ups and controls until we actually get a therapy or a vaccine," the banker said. "I think we should all be focusing on an 18-month strategy for our healthcare system and our economy.

"If it ends up being shorter than that," Kashkari continued, "that's great, [but] we should prepare for the worst-case scenario."

Scientists have said that an effective vaccine would take between 12 and 18 months to produce.

NEWS: @neelkashkari of the @MinneapolisFed doesn’t think there will be a swift economic recovery. pic.twitter.com/AFyHiLxaKq

— Face The Nation (@FaceTheNation) April 12, 2020

The Federal Reserve official expressed skepticism that the economy would be able to start up quickly and easily at any time in the near future. He said that there would likely be "turning back on, maybe turning back off" of the economy in the coming months.

"This could be a long hard road that we have ahead of us until we get to either an effective therapy or vaccine," Kashkari said. "It's hard for me to see a V-shaped recovery under that scenario."

In regards to the growing number of unemployment claims, Kashkari asserted "it's all driven by the virus." He said "we just don't know" how many people will inevitably lose their jobs, pointing out that there are a wide range of estimates.

Some conservative pundits and Republican lawmakers have been questioning the current government strategy of stringent social distancing. They have argued that the economic damage could be greater than the risks of coronavirus. However, health experts and doctors have noted that social distancing measures and shutting down large sectors of the economy are the only way to save hundreds of thousands, and potentially millions, of lives.

"We should stop thinking of the health and economic responses as separate. They are not," former Vice President Joe Biden, the presumptive Democratic presidential nominee, wrote in a New York Times opinion article published on Sunday.

But the stringent social distancing measures, which have shut down restaurants, gyms, bars, stores, schools and events across the country, have led to significant economic fallout. Just in three weeks, the economy has seen record breaking jobless claims, with nearly 17 million Americans having already filed for unemployment insurance.

James Bullard, president of the Federal Reserve Bank of St. Louis, told Bloomberg News in late March that he projected unemployment could reach 30 percent, while GDP could drop by 50 percent. Treasury Secretary Steven Mnuchin had previously warned Republicans that it could rise as high as 20 percent.

Neel Kashkari
Minneapolis Federal Reserve Bank President Neel Kashkari visits Maria Bartiromo's Wall Street at Fox Business Network Studios on October 11 in New York City Roy Rochlin/Getty

As government officials discuss how and when to start reopening the economy, health experts have warned that mitigation steps must be in place to prevent further outbreaks moving forward. Dr. Anthony Fauci, a key member of the White House Coronavirus Task Force and the director of the National Institute of Allergy and Infectious Diseases, said on Sunday that he hoped Americans would be able to safely go to the polls to vote in the November general election. But he cautioned that it's difficult to predict whether a "rebound" of the virus could occur.

As of early Sunday afternoon, over 542,000 people were confirmed to have the coronavirus within the U.S., according to a tracker updated by Johns Hopkins University. Of those, more than 20,000 have died while over 32,000 have already recovered.

Globally, more than 1.8 million people have been infected while over 113,000 have died and over 377,000 have recovered.