Most dangerous phase of US Covid-19 crisis may be yet to come | Barry Eichengreen

The health emergency and the economic fallout is likely to worsen in October

April marked the most dramatic and, some would say, dangerous phase of the Covid-19 crisis in the US. Deaths were increasing, bodies were piling up in refrigerated trucks outside hospitals in New York City and ventilators and personal protective equipment were in desperately short supply. The economy was falling off the proverbial cliff, with unemployment soaring to 14.7%.

Since then, supplies of medical and protective equipment have improved. Doctors are figuring out when to put patients on ventilators and when to take them off. We have recognised the importance of protecting vulnerable populations, including the elderly. The infected are now younger on average, further reducing fatalities. With help from the Coronavirus Aid, Relief, and Economic Security (Cares) Act, economic activity has stabilised, albeit at lower levels.

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There will be less policy support now if the economy again goes south