Fed’s Barkin Warns Economy Faces ‘Sinkhole’ Requiring More Aid

The U.S. economy has lost momentum in recent weeks because of a resurgence of the coronavirus and that may call for more sustained fiscal support to cushion the blow, a senior U.S. central banker said.

“We thought the economy faced a pothole and stimulus put a plate over it so we could navigate,” Federal Reserve Bank of Richmond President Thomas Barkin told a webinar hosted by the Center for Regional Economic Competitiveness Tuesday. “Now escalation of the virus may make the pothole into a sinkhole and that would create the need for a longer plate. If Congress takes away support too abruptly, you know what could happen to my metaphorical automobile.”