The US will need to spend trillions more as economy takes until 2022 to fully recover: CNBC survey
- A third of respondents in the CNBC Fed survey believe the economy won’t be fully restored until the second quarter of 2022, but there are a wide range of views about the recovery.
- More money will be needed from the Federal Reserve and Congress to combat the pandemic slowdown.
- GDP will decline by 24% this quarter, respondents to the survey predicted. The unemployment rate will rise as high as 19% and remain elevated through next year, they said.
- Other highlights: Rates will remain at zero the rest of year, stocks will finish lower from here and there is a strong chance of a second contagion.
The economy could take one to two years to rebound to full strength and the Federal Reserve and Congress, having already committed historic sums to fight the coronavirus pandemic, will have to commit trillions more, according to respondents to the CNBC Fed Survey.
With the Federal Reserve’s balance sheet already at an unprecedented $6.45 trillion, the 36 respondents see it rising on average to $9.8 trillion. The additional trillions will be added by the end of the current quarter, the respondents expect. Congress, having already committed about $2.5 trillion, is seen putting in an additional $2 trillion.