In an eerie announcement, Federal Reserve Bank of St. Louis President James Bullard predicted on Sunday that the United States might see its unemployment rate reach 30% in the second quarter of 2020, the highest since the Great Depression, due to shutdowns currently underway as part of the country's effort to combat the coronavirus pandemic that has infected over 30,000 Americans.
According to Bloomberg, Bullard also warned that the nation should brace for an unprecedented 50% decline in GDP, the gold-standard for measuring a country's economic output and vitality.
'$2.5 trillion in lost income'
In his comments, the Federal Reserve president called for a massive fiscal response to replace the $2.5 trillion in lost income in the second quarter of 2020 to ensure a robust economy. He added that the Fed stands ready to ensure global markets continue functioning during the crisis.
"Everything is on the table" as far as lending programs, Bullard told Bloomberg on Sunday.
"There is more that we can do if necessary." he said. "There is probably much more in the months ahead depending on where Congress wants to go."
'It is a huge shock'
Bloomberg also reported:
Bullard's grave assessment of the world's largest economy underscores the critical need for Congress and the White House to quickly find agreement on a massive aid program. The Fed last week restarted financial crisis-era programs to help the commercial paper and money markets, after cutting interest rates to near zero and pledging to boost its holdings of Treasuries by at least $500 billion and of mortgage securities by at least $200 billion.
"This is a planned, organized partial shutdown of the U.S. economy in the second quarter," Bullard said, according to Bloomberg. "The overall goal is to keep everyone, households and businesses, whole" with government support. "It is a huge shock and we are trying to cope with it and keep it under control."