Fed’s Bullard: Looks like April will be low point of recession

“The virus has proven to be less deadly than initially feared but also turned out to be more persistent,” St. Louis Federal Reserve President James Bullard said on Monday. “You still have to take mitigating actions to keep the disease under control even if fatalities come down.

Additional takeaways

“It looks like April will be the low point of the recession.”

“May and June surprised to the upside and expecting a slowdown in the recovery in July to be consistent with expectations we shouldn’t expect a smooth transition going forward.”

“The mortality risk for COVID has surpassed that of accidental injury to become the third-largest killer in 2020.”

“Masks are cheap, easy to use technology that can greatly mitigate the spread of the disease and will become ubiquitous.”

“Testing is critically important and closer to becoming ubiquitous as it becomes quicker and easier.”

“Better therapeutics for the disease itself is going to help us going forward.”

“Unemployment is high today because we’re deliberately asking certain types of businesses to shut down.”

“Workers are being asked to stay home and we’re compensating them for that through the unemployment insurance program.”

“The majority of workers, or 60%, are expecting to be recalled to their jobs in contrast to 2009 when 10% to 15% of people were on temporary layoffs.”

“The idea of keeping businesses and households whole has been successful, as evidenced by personal income being higher than before the pandemic.”

“There are certainly downside risks and this can unravel on us, something that can happen in any crisis.”

“Focusing too much on the vaccine increases the risk of a depression because you could have a lot of people sitting around waiting for a vaccine to save the day.”

“From an economic perspective, it’s best to roll up our sleeves, produce the goods that are needed and maintain household income to stabilize the economy.

Market reaction

The US Dollar Index, which touched a daily high of 93.99, continues to consolidate its daily gains and was last up 0.15% on the day at 93.60.