MNI BRIEF: Fed's Harker Sees Signs Economy is Plateauing

Philadelphia Federal Reserve President Patrick Harker said Wednesday there are signs economic momentum is stalling through a second wave of the pandemic and the lack of continued fiscal support for struggling families.

"For now, I'm forecasting moderate growth for the rest of this year and the first quarter of 2021 that keeps us below the pre-pandemic trend. Indeed, we are currently seeing signs of plateauing in the economy," Harker said in the text of a speech. While growth should become more "robust" in the second half of next year, that's premised on another USD1 trillion of fiscal stimulus and a safe and effective vaccine becoming available over that time.

"I recently had a conversation with a major banker who expressed deep concerns about the fast-approaching "fiscal cliff," as many Americans will soon lose their unemployment benefits and begin to face hardships like eviction and foreclosure. Unemployment claims are already on the uptick," he said. The economy faces another obstacle from the loss of confidence that was provided by 13-3 facilities the government pushed to wind down at the end of the year, and Harker said until the pandemic is resolved, "the fewer changes we make to our lending facilities, the better."