KANSAS CITY, Mo. — The U.S. economic outlook through the first half of 2009 is “grim,” and the first signs of a recovery may not emerge until the third quarter, said Thomas Hoenig, president of the Federal Reserve Bank of Kansas City.
“When you look ahead, it is grim,” Hoenig said Wednesday during a speech. “We will have negative growth through the first half of the year.”
The bank president’s remarks underscore the view of policymakers that “substantial” risks to the economy remained when they cut the benchmark interest rate to a record low last month to stem the year-long recession.
Hoenig joined San Francisco Fed president Janet Yellen, Chicago Fed president Charles Evans and many economists in endorsing a fiscal stimulus plan to combat the recession.
“If we do it, and do it right, we will come out a better economy for it,” Hoenig said.
