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Southwest Economy, Fourth Quarter 2020

President’s Perspective

Rob Kaplan, president and CEO of the Dallas Fed, regularly speaks and writes on the factors that affect economic growth in the nation and Eleventh District. Here are some of his recent thoughts on key issues:
On the Outlook for Economic Growth

“[The U.S. economy] is still growing, but this growth is probably stalling. And the reason it is decelerating is primarily due to a resurgence in COVID-19 around the country. ... It is our view that the last part of the fourth quarter and certainly the first quarter [of 2021] are going to be very challenging in the United States, and growth is going to be decelerating and the rebound is going to be much more muted. The good news is that due to prospects for a vaccine, it is also our view that as we get into 2021, we are going to see GDP [gross domestic product] growth at or greater than 3.5 percent, well above trend growth.”

2020 System Energy Conference Hosted by the Federal Reserve Banks of Dallas and Kansas City—Nov. 20, 2020

On the Appropriate Fed Response to the Resurgence of the Virus

“I do think it is critical that the 13.3 programs—these public market backstop programs and programs that support the Main Street Lending Program and PPP [Paycheck Protection Program]—continue beyond year-end. I think that is very important. I would continue our bond buying at the same pace. If we needed to, if this got bad enough, we could extend maturities, but I would not increase the size. I think there are tools that we have, and we are going to have to watch this [resurgence of the virus] very carefully.”

Interview with David Westin on Bloomberg TV—Nov. 19, 2020

On the Future of the Energy Industry

“Scale is more important. Companies will be bigger. They will be more consolidated. They will be able to operate with lower costs. They are also going to incorporate environmental considerations, like sequestration, to produce in a way that emits less greenhouse gas. The industry will be alive and well, but there will be fewer players, and they will be bigger.”

Council on Foreign Relations—Nov. 10, 2020

On the Need for Additional Fiscal Stimulus

“It wouldn’t surprise me to see some extension of this fiscal stimulus sooner rather than later, because in this [COVID-19] resurgence, we have millions of people who are making ends meet based on the extension of this fiscal stimulus. If [this aid] isn’t renewed, it won’t just hurt them, it will hurt the entire economy.”

Bloomberg’s Future of Finance Event with Mike McKee—Nov. 10, 2020

Southwest Economy is published quarterly by the Federal Reserve Bank of Dallas.

Articles may be reprinted on the condition that the source is credited to the Federal Reserve Bank of Dallas.

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