Fed's Evans: Worried about downside risks to economy from spread of virus

The continuing spread of the coronavirus is likely to put a damper on consumer sentiment, Chicago Federal Reserve Bank President Charles Evans said on Thursday.

Additional takeaways

"Controlling virus, wearing masks is important to getting consumers feeling comfortable."

"Baseline outlook is for US economy to shrink 30% to 35% in the second quarter with strong growth in the second half."

"Expecting 9% or 9.5% unemployment at the end of this year, 6.5% next year."

"If there is a second wave of outbreak, would expect worse unemployment, growth."

"Worried about downside risks to the economy from the spread of the virus."

"Expecting US GDP to get back to prior peak by middle or late 2022."

"It's not hard to figure out that Fed needs provide accommodation when unemployment is high, inflation is low."

"No reason not to have strong monetary policy accommodation with unemployment above healthy levels."

"Only reason to move away from accommodative policies would be higher-than-target inflation and that's not likely."

Market reaction

As of writing, the US Dollar Index was up 0.27% on the day at 96.30.