By Josh Mitchell 

Federal Reserve Vice Chairman Richard Clarida said he expects the economy to grow in the third quarter, adding that activity could return to pre-pandemic levels by the end of 2021.

"My own personal forecast is that we'll see a rebound in economic activity in the third-quarter data," Mr. Clarida said Wednesday on CNBC. He added that "it will take some time" for economic activity to return to its level in February, the month before the pandemic forced parts of the economy to shut down.

"We could get back to the level of activity perhaps towards the end of 2021," he said.

Mr. Clarida said the economy's path depends on the course of the coronavirus and mitigation efforts. The coronavirus hasn't yet inflicted long-term damage to the U.S. economy, he said, but the risk will grow the longer the pandemic lasts.

Mr. Clarida added that the Fed is open to modifying its lending programs to ensure aid is deployed effectively to support the economy.

Write to Josh Mitchell at joshua.mitchell@wsj.com

(END) Dow Jones Newswires

August 05, 2020 12:26 ET (16:26 GMT)