Failure to slow the spread of COVID-19 could spark a full-blown financial crisis, Fed president says
- A second wave of coronavirus infections could drive a slew of bankruptcies and kick off a dire financial crisis, James Bullard, president of the Federal Reserve Bank of St. Louis, told the Financial Times.
- The US is “still in the middle of the crisis here,” he said, adding “the disease is still quite capable of surprising us.”
- While some legislators have questioned the necessity of the Fed’s corporate bond purchases, Bullard ensured the central bank’s goal is “to make sure the markets don’t freeze up entirely” and spark a deeper recession.
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The coronavirus’ hit to revenues risks a wave of bankruptcies and backs up the Federal Reserve’s relief efforts, James Bullard, president of the Federal Reserve Bank of St. Louis, told the Financial Times.
The US is slowly climbing out of its worst recession in nearly a century, yet soaring COVID-19 case counts in Texas, Florida, California, and other states have revived fears of a second major outbreak. The country is “still in the middle of the crisis here,” Bullard said, and virus-fueled insolvencies could lengthen the already severe economic …continued .
[Source: Business Insider]