Fed's Mester says further direct fiscal support is needed

Loretta Mester is President of the Federal Reserve Bank of Cleveland

• says this is the worst and speediest deterioration in the labor market many of us have ever seen
• says second quarter will show the most severe effects on the economy
• baseline outlook is for economy to begin to grow again in 2nd half as some stay-at-home restrictions lifted
• says more pessimistic scenario with surge in new coronavirus cases requiring more shutdowns is almost as likely as baseline
• further direct fiscal support is needed to avoid longer-lasting damage to the economy
• there has been improvement in market functioning since fed launched emergency lending facilities
• she expects inflation to remain low for remainder of year and some time to come