Minneapolis Federal Reserve Bank president Neel Kashkari in New York City last October. Photo: Roy Rochlin/Getty Images

A top Federal Reserve official told CBS Sunday that a "really hard" four- to six-week lockdown could benefit the U.S. economy as Congress "has the resources to support those who are most hurting" during the coronavirus pandemic.

Details: Minneapolis Federal Reserve Bank president Neel Kashkari said a short lockdown "could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it's happening in the Northeast right now."

  • If that doesn't happen, "we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two," Kashkari said.
  • He predicted that "many, many more" small and big businesses would file for bankruptcy, leading to a "much slower recovery for all of us," with businesses taking longer to rebuild and then to bring workers back in.

Why it matters: As the country continues to grapple with the outbreak, the U.S. economy shrank at an annualized 32.9% rate in the second quarter — the worst-ever contraction on records that date back to 1947, Axios' Courtenay Brown notes.

Of note: Kashkari said the U.S. personal savings rate had "taken off." "Before the crisis, it was around 8%," he added. "Now it's around 20%."

  • Americans who are still working and saving more enables more resources for Congress to support those who've been laid off, Kashkari explained.
  • "Right now the U.S. can fund itself at very, very low rates. Congress should use this opportunity to support the American people and the American economy," he added.

The big picture: Coronavirus cases began declining or holding steady in most states by the end of last month. However, two of the worst U.S. hot spots, California and Florida, have shown little improvement after weeks of deterioration.

  • White House coronavirus task force coordinator Deborah Birx noted Sunday the U.S. has shifted into a new phase of the pandemic, after infections spread further into rural areas.
  • Against this backdrop, lawmakers are conducting negotiations on the next stimulus bill, which have stalled amid a congressional deadlock.

What they're saying: Treasury Secretary Steven Mnuchin told ABC's "This Week" Sunday, "There's obviously a need to support workers and support the economy. ... On the other hand, we have to be careful about not piling on enormous amount of debts for future generation."

  • Per CNBC, President Trump said last week, "I really do believe a lot of the governors should be opening up states that are not opening."

By the numbers: More than 154,800 people have died of COVID-19 and almost 4.7 million people have tested positive for the virus in the U.S., per Johns Hopkins.

Go deeper

Bryan Walsh, author of Future
Sep 23, 2020 - Health

America's halfway coronavirus response

Illustration: Sarah Grillo/Axios

Some of the same technological advances that have enabled us to partially weather the economic and health tolls of the pandemic may be paradoxically discouraging us from taking fuller measures.

Why it matters: Thanks to tech like video chat and automation, a large portion of the population has been able to mostly escape the effects of the pandemic — and even thrive in some cases. But far too many of us risk being left further behind as the virus spreads.

21 hours ago - World

Israeli PM announces strict lockdown plan after record coronavirus cases spike

Israeli Prime Minister Benjamin Netanyahu speaks during an August news conference in Jerusalem. Photo: Debbie Hill/AFP via Getty Images

Prime Minister Benjamin Netanyahu announced plans for a "full lockdown" after Israel reported a new daily coronavirus cases record of 6,923 infections Wednesday.

Why it matters: Israel last Friday became the first developed country to re-enter lockdown. While schools, retailers and other businesses closed for the three-week measure, there are exemptions including for people to pray, go to work, exercise and protest. The new two-week restrictions that still needs Cabinet's full approval aims to address this, AP notes. "The goal is to reduce the rate of infection, and the goal is literally to save many lives in Israel," Netanyahu said.

Coronavirus cases rise in 22 states

Expand chart
Data: The COVID Tracking Project, state health departments; Note: Texas added a backlog of cases on Sept. 22, removing that from the 7-day average Texas' cases increased 28.3%; Map: Andrew Witherspoon, Sara Wise/Axios

The coronavirus is surging once again across the U.S., with cases rising in 22 states over the past week.

The big picture: There isn't one big event or sudden occurrence that explains this increase. We simply have never done a very good job containing the virus, despite losing 200,000 lives in just the past six months, and this is what that persistent failure looks like.

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