July 8, 2020
St. Louis Fed President James Bullard said during an interview on CNBC’s Closing Bell that he’s still fairly optimistic in his base case about the U.S. recovery.
He said that the third quarter will have a lot of adjustment in the private sector, as businesses think about how they can get their products out the door with COVID-19 still around. That can be done and can be managed, he added.
In terms of the unemployment rate, Bullard discussed how volatile that number is—declining by 360 basis points in just two months (from 14.7% in April to 11.1% in June).
“By the end of the year, you can get down to single digits and maybe even below 8%, maybe even 7%,” he said. He added that many of the unemployed are saying they are on temporary layoff, and he expects most of those people could be recalled within the next 90 days.
During the interview, Bullard also discussed face masks becoming ubiquitous, downside risks to the economy, negative interest rates, the prospects for additional fiscal stimulus, and the Fed’s purchases of corporate debt.
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