Boston Fed President Eric Rosengren said Wednesday he was less optimistic than many of his colleagues about the economic outlook, despite encouraging economic data over the summer.
The Fed's median forecast is quite optimistic, assuming that the unemployment rate will fall to 7.6% by the end of the year and 5.5% by the end of 2021, while inflation gradually returns to the 2% target.
"I believe the economy remains fragile," said Rosengren in a speech to the Boston Chamber of Commerce.
The Boston Fed President said his forecast for a slower recovery depended on "several challenges" the economy could face in the months ahead.
"I am concerned that a second wave of COVID-19 infections is likely this fall and winter, which could lead some states to further restrict mobility and personal interactions," said Rosengren.
He said he was also concerned that more spending by Congress in support of the economy "is unlikely to happen anytime soon".
Rosengren added that he expects the financial impact of companies affected by the virus "to become major headwinds" in the future.
"I definitely hope that this less optimistic outlook turns out to be wrong," said the President of the Boston Fed.
He said additional fiscal stimulus and continued monetary stimulus are still needed.
Stocks were lower on Wednesday with the Dow Jones Industrial Average
by 120 points.