The pace of the US economic recovery will depend on the progression of the US pandemic, particularly on the severity of the possible second wave, according to a report by Mark Spiegel, senior policy advisor at the Federal Reserve Bank of San Francisco.
Spiegel cites two possible scenarios: an early recovery and a delayed recovery.
Early recovery assumes most social distancing measures will be phased out by the end of the year. The delayed recovery also estimates the social-distancing measures will be phased out at the same speed but that a second wave of infection will cause shelter-in-place restrictions to be put back in place. Both scenarios presume a vaccine will become available by the middle of next year.
The US economy will rebound beginning in the third quarter of this year under projections for the early recovery. The delayed rebound projects growth in the third quarter but a contraction in the fourth quarter.
Spiegel’s full report is available online.