June 18, 2020 / 5:43 PM / 17 days ago

Fed's Mester says it could take two years for economy to return to pre-Covid levels

FILE PHOTO: Cleveland Federal Reserve Bank President Loretta Mester speaks in London, Britain, July 2, 2019. REUTERS/Marc Jones

NEW YORK (Reuters) - It could take a year or two for the U.S. economy to return to levels seen before the pandemic, Cleveland Federal Reserve Bank President Loretta Mester said on Thursday.

Mester said she expects the economy to decline by 6% in 2020 and for the unemployment rate to remain elevated at around 9% at the end of this year. “We’re going to see the economy recovering, but to get back to pre-pandemic levels, it’s going to take another year or two,” Mester said during a virtual chat on Thursday.

The economic crisis caused by the coronavirus pandemic has not altered her expectations for long-term economic growth, which she expects will remain low at around 2%, she said.

Reporting by Jonnelle Marte

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