Dallas Fed chief says mask-wearing key to future growth

The president of the Federal Reserve’s regional bank in Texas, a state hard-hit by the new US coronavirus outbreak, has called for more “discipline” in wearing masks, saying official health guidelines were more important to the country’s economic fate than fiscal or monetary policy.

Robert Kaplan, head of the Dallas Fed, said on Monday he was concerned the US economic rebound was slowing due to the outbreak across the sunbelt, including Texas — and that public attitudes on healthcare protocols were at the “forefront of economic policy in the US”.

“While fiscal and monetary policy have a key role to play, there’s no question, based on conversations I’ve had extensively with epidemiologists and infectious disease experts throughout the US, that if all of us wore a mask, we would likely substantially mute the transmission of this disease,” Mr Kaplan said in webcast remarks to the National Press Club.

“We would have higher GDP from here, and we would have a lower unemployment rate,” he said.

Mr Kaplan’s remarks came as Florida again posted one of the highest one-day increases in coronavirus cases since the outbreak began, with 12,624 infections over the past 24 hours. That is second only to the 15,300 reported on Sunday, the largest increase of any state since the start of the pandemic.

Florida also reported that 8,088 people had been hospitalised with Covid-19, up from 6,974 on Friday when the state first began reporting the figures. Miami-Dade county represented 1,807 of those hospitalisations, with another 1,209 in neighbouring Broward county.

The outbreak in Florida, Texas and other sunbelt states has forced authorities to reverse economic reopening plans. Mr Kaplan, a former Goldman Sachs banker, said that if Americans successfully tamed the coronavirus virus — including through better testing and contact tracing — many consumers would be more comfortable going out to restaurants, and engaging in other leisure activities, including travel.

Instead, the resurgence of the virus, including higher hospitalisation rates, was having a “chilling effect” on the economy. Mr Kaplan said that even though individual freedoms were important in the US, he compared following the guidance of US health officials to wearing seat belts and not texting while driving — essential safety precautions that saved lives.

The latest daily increase in Florida takes the state’s seven-day average of new cases to 10,855 a day, the first time any state has averaged more than 10,000.

The rate of tests coming back positive in Florida dropped to 11.3 per cent from 15.5 per cent on Sunday. Florida’s positivity rate over the past seven days stood at 18.7 per cent and remained level compared with the previous week, according to a Financial Times analysis of data form the Covid Tracking Project

There were 35 additional deaths in the state attributed to the virus, the lowest daily toll since July 5.

The number of people currently hospitalised in Florida now exceeds that of California, which on Sunday saw its tally ease for the first time in 22 days to 7,854 from a record 7,904 on July 11.

Texas had the highest number of people currently hospitalised in any US state, with 10,410 people as of Sunday.