Fed’s Bullard Says ‘Full Recovery’ for U.S. in Reach by Year End

© Bloomberg. James Bullard, president and chief executive officer of the Federal Reserve Bank of St. Louis, gestures while speaking at the 2019 Monetary and Financial Policy Conference at Bloomberg’s European headquarters in London, U.K., on Tuesday, Oct. 15, 2019. Bullard said U.S. policy makers are facing too-low rates of inflation and the risk of a greater-than-expected slowdown, suggesting he’d favor an additional interest rate cut as insurance.


(Bloomberg) — Federal Reserve Bank of St. Louis President James Bullard, in the most upbeat comments by a central banker since the start of the Covid-19 outbreak, said the U.S. economy may surge at a 35% annualized rate in the third quarter and the nation may be close to a complete recovery by year-end.

Rapid expansion in gross domestic product in the third quarter “may put the U.S. economy within reach of a sort of ‘full recovery’ by the end of 2020,” Bullard, who doesn’t vote on monetary policy this year, said in comments prepared for a virtual presentation to the Global Interdependence Center Thursday.

With real GDP possibly rising at a 10% rate in the fourth quarter, national income at the end of this year would be in reach of the average level for 2019, Bullard said. The comments contrast sharply with those of most other Fed officials, who have strongly urged for more fiscal aid to keep what they see as a tenuous recovery on track.

“These are big numbers, but not outside the realm of possibility,” he said. “I expect this rebound to continue in the U.S. as businesses learn how to produce products and services safely using simple, existing technology.”

READ  Royal Mail staff 'lack sufficient protection' from coronavirus

‘Considerable Resources’

Speaking in a Bloomberg Television interview earlier this week, Bullard said that he believed the economic recovery would remain on track even without more fiscal aid.

Fiscal support, which has totaled about $3 trillion, has exceeded the actual shortfall in gross domestic product, “so in an aggregate sense there are considerable resources pledged to combat the crisis,” Bullard said in his presentation.

“Simple mortality risk-mitigation strategies hold the promise of delivering higher household incomes along with lower fatalities from Covid-19, thus improving outcomes along both dimensions,” he said. “The downside risk remains substantial and continued execution of a granular, risk-based health policy will be critical in the months ahead.”

The labor-market outlook is bright, the St. Louis Fed official said.

Many of the layoffs during the pandemic were temporary furloughs so “there is room for a substantial decline in the official unemployment rate in the months ahead.”

©2020 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

READ  Golf: Blistering Kuchar jumps into Singapore lead after birdie binge



Please enter your comment!
Please enter your name here