The US economy is facing a huge shock to the system but is expected to rebound quickly according to St. Louis Federal Reserve President, James Bullard.
Estimates of 30% unemployment have been discussed, higher than the Great Depression. However, due to the international nature of this pandemic, a swift rebound is expected due to “pent up demand” and a return to normal production levels.
Extraordinary steps have been taken including lowering short term borrowing rates to near zero, as well as a host of programs to keep the markets functional.
Unemployment has been at a 50 year low and is expected to settle back to that once the initial spike has passed.
“You’d have this huge spike mostly centered in the second quarter, but everyone knows exactly what that is, that’s pandemic relief that’s done on purpose,” he said. “If we can get this to work right, everything will snap back to normal once this is over.”