"I do think recovery can commence in the second half of the year," Clarida said on Tuesday. "I think the broader picture is that we are providing support to Main Street and we don't want to minimize the difficult challenge the economy faces near term."
Clarida said he hoped the US economy is not scarred by the COVID-19 pandemic and that he was not sure "what rabbits from the hat" the Federal Reserve could continue pulling to spur growth.
The Federal Reserve has launched nine different programs worth $4 trillion to prop the financial markets and provide loans to companies stricken by the COVID-19 crisis.
"What we have is a toolkit that we’re deploying now and we can deploy more as needed in the future in terms of our lending," Clarida said. "Is there a limit to what the Fed can do? Well, there is no statutory limit. Our balance sheet is a decision that we make as a committee under the appropriate guidelines and particulars."
About 1.2 million Americans have contracted the novel coronavirus and some 70,000 have died from the COVID-19-related complications.
US agencies, including the Treasury Department, have so far committed more than $6 trillion to rescue the US economy from a nearly seven-week lockdown forced by the virus.