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Abstract:"It is a huge shock and we are trying to cope with it and keep it under control," St. Louis Fed chief James Bullard told Bloomberg.
Unemployment in the US could rocket to 30% next quarter as coronavirus rages, and gross domestic product could plunge 50%, a senior Fed official told Bloomberg on Sunday.“It is a huge shock and we are trying to cope with it and keep it under control,” said James Bullard, president of the St. Louis Fed.Bullard called for a ramp up in government spending to offset an estimated $2.5 trillion in lost income next quarter.He added that the Fed is ready to lend more and ramp up Treasury purchases to shore up markets against the pandemic's economic fallout.Visit Business Insider's homepage for more stories.
US unemployment could surge nearly 10-fold to 30% next quarter and gross domestic product could plummet 50% as the novel coronavirus shuts down a big chunk of the economy, a senior Federal Reserve official told Bloomberg on Sunday.“This is a planned, organized, partial shutdown of the US economy in the second quarter,” James Bullard, president of the St. Louis Fed, said in the phone interview. “It is a huge shock and we are trying to cope with it and keep it under control.”Bullard called for a big boost in government spending to offset an estimated $2.5 trillion in lost income next quarter and underpin a national recovery. He also ridiculed the idea of allowing key economic sectors to collapse.“It is totally stupid to lose a major industry because of a virus,” he told Bloomberg. “Why would you want to do that?”Read more: 'Massive implications': One market bear breaks down how the Fed's unprecedented actions before the coronavirus turmoil may have opened the door to a 72% crash
The Fed, which has already cut interest rates to near zero and restarted emergency programs, is ready to use its tools to shore up the US economy, Bullard continued. “Everything is on the table” in terms of further lending, he said.The central bank is also willing to spend far more on Treasury bonds than the $500 billion it recently authorized, Bullard told Bloomberg. “We are trying to provide as much support as we can to that market.”Bullard predicted the US economy would recover some momentum in the third quarter, and a strong rally could lead to two “boom quarters” over the following six months.The Fed official's forecasts are bleaker than even those of Goldman Sachs, which expects a 24% US GDP decline in the second quarter. Goldman's economists also estimate that more than 2.2 million Americans filed for unemployment benefits last week, more than triple the previous weekly record.Read more: GOLDMAN SACHS: Buy these 15 cheap, cash-rich stocks in order to dominate the market, even as we barrel towards recession
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This week's major events include Powell's cautious outlook on rate cuts, TSMC's gains amid Samsung's strike, and Putin's diplomatic efforts. In China, the PBOC prepares bond interventions, while Korea's Hahn & Co. raises $3.4 billion. Deflationary pressures persist in China. US and European legal and regulatory changes impact market sentiment. Key data releases are NFIB Small Business Optimism, Core CPI, PPI, and Michigan Consumer Sentiment for the USA.
We are honored to share that AUS GLOBAL, as an invited guest of the United Nations forum on Science, Technology and Innovation (UNSTI), successfully completed the important mission of this event on June 20, 2024 at the Palais des Nations in Geneva, Switzerland.The forum brought together dignitaries and renowned business people from around the world to discuss important topics such as global fintech development and environmental protection.
In a world where economies ebb and flow like tides, a powerful institution holds the keys to the kingdom of money. Nestled in the heart of the United States, the Federal Reserve looms as a force to be reckoned with, shaping the very fabric of the global financial landscape. But what exactly is the Federal Reserve, and how does it exert its influence over the value of the almighty U.S. dollar and the broader global economy? Let’s explore it in great depth!
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