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Bullard Discusses Economic Impact of the Pandemic on CNBC

May 6, 2020

St. Louis Fed President James Bullard shared his views on the economic goals during this shutdown period and his expectations for the economy once the initial shock is over. He spoke during an interview on CNBC’s Squawk Box program.

The main goals are to stay out of financial crisis and depression while trying to deal with the pandemic, Bullard said, adding that so far the response has been good.

“I think the understanding at a general level is very good about what we’re trying to do here,” he said. “We’re trying to ask people to stay home, get the pandemic under control, and gradually reopen in a healthy way.”

In discussing his outlook for the economy, he said that the main negative impact will be in the second quarter. He expects the third quarter to be a transition quarter with relatively rapid growth, and said that hopefully the process will be finishing up in the fourth quarter.

Bullard noted that the unemployment rate could reach 20% or even higher, but that the unemployment insurance program and the Paycheck Protection Program are helping workers during the shutdown situation.

During the interview, Bullard also discussed the Fed’s 13(3) lending programs (authorized under that section of the Federal Reserve Act), interest rates and the Fed’s balance sheet.

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