Clarida: 'Pent up demand' for services a potential 'tailwind' when pandemic eases

FILE PHOTO: Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day "Challenges for Monetary Policy" conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby

WASHINGTON (Reuters) - Months spent avoiding restaurants, bars, airplanes and other face to face activities are a potential “tailwind” once risks from the coronavirus can be tamed, Fed vice chair Richard Clarida said.

“There is pent up demand in service sectors. We had the shut downs and the very very aggressive mitigation efforts in the spring,” Clarid said in comments to the Institute of International Finance. “Since then service sectors have been impacted not by government decree...People have changed their preferences for high touch activities...I am not an epidemiologist but the arrival of a vaccine, and also at home testing together could change the picture quite dramatically. We have a lot of accumulated saving and that will be a tailwind to the economy when we get to the other side of this.”

Reporting by Howard Schneider; Editing by Chizu Nomiyama