The COVID-19 Pandemic, the Economic Outlook, and the Main Street Lending Program

Unfortunately, the economic outlook is being driven by the course of the pandemic, and much depends on how successfully it can be contained, either through public health or medical innovations. The forecast for the U.S. economy this fall is quite uncertain, but President Rosengren's view is that the recent slowdown in economic activity that we have seen in high frequency data is likely to continue. Currently, we have an unemployment rate above 10 percent, and because of the continued community spread of the virus, he is concerned that the pandemic will limit the ability of the economy to recover quickly. As a result, an increasing number of those who are currently temporarily unemployed may ultimately have to face permanent layoffs and the difficult task of finding a new job in a changed economic environment. The Fed is focused on doing all in its power and purview to support the economy, including through efforts it is very proud of, like the Main Street program that again President Rosengren recommends lenders, businesses, and nonprofits explore participating in. While the fiscal and monetary stimulus has been significant, it cannot fully offset the economic drain caused by the public health crisis. Limited or inconsistent efforts by states to control the virus based on public health guidance are not only placing citizens at unnecessary risk of severe illness and possible death – but are also likely to prolong the economic downturn.