Will We See A V-Shape Recovery After Coronavirus? FED’s Bostic Thinks So!
The global economy is heading for a deep recession this year, especially during Q2, although we don’t even know if or when the coronavirus will be tackled, so things might even get worse. Some say this will turn out to be an even worse crisis that the financial crisis of 2008-09.
But, that was a crisis of confidence. People and investors weren’t willing to spend for years, which kept the economic weakness going on. But, this time the recovery might be faster. If the virus is tackled, then the people will rush out to enjoy life again and we will likely see quick recovery, because people will want to work as much as they can, since most have run out of money to live, despite the help from different governments.
So, I think that the global economy will rebound pretty fast, but only when the virus goes, because today we saw the number of cases increase again in China. The coronavirus will have to be tackled globally, because it will be transmitted from country to country, even if some countries manage to wipe it out. FED’s Bostic made some comments a while ago, which sounded sort of optimistic:
Atlanta Fed President Bostic Speaking on a Florida Radio Station
- Recovery should be much more robust
- Optimistic about Fed congressional response to crisis
- Recovery should be much more robust than from usual recession
- Difficult to predict how many more may become jobless and coming weeks giving lack of historical precedent for this type of event
- Strength of recovery depends on whether families and businesses trust that health risks are controlled, or whether they lose confidence
- Critically important US avoid housing crisis growing out of the pandemic
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