Even as the economic data from the US indicates signs of improvement in the economy over recent weeks, Fed officials have cautioned against getting hopes high about economic recovery until the pandemic is brought under control. At its most recent monetary policy meeting, the Fed had warned that complete recovery could take several years in the aftermath of the current coronavirus crisis.

Fed officials are now sounding wary about reopening the economy too quickly and risking a second wave of infections, which could send unemployment levels rising all over again across the US. Over the past few days, some US states have reported a spike in the number of coronavirus cases and hospitalizations, raising concerns of a second wave.

At a recent event, Boston Fed President Eric Rosengren noted, “This lack of containment could ultimately lead to a need for more prolonged shut-downs, which result in reduced consumption and investment, and higher unemployment.”

Minneapolis Fed President Neel Kashkari also highlighted concerns about bringing the pandemic under control before it turns into a second wave, adding, “Unfortunately, my base case scenario is that we will see a second wave of the virus across the U.S., probably this fall. If there is a second wave, I would expect the unemployment rate to climb again.”