The deep recession triggered by the coronavirus is the worst downturn since the Great Depression, but the hope is that the rebound will be equally swift and strong–a ‘V’ recovery. Unfortunately, the outlook for this best-case scenario is precarious.
Some Federal Reserve officials are managing expectations down, advising that the path of the rebound may be slow and uneven. “I don’t expect a sharp V-shaped recovery, I expect something more like negative quarters of growth throughout 2020, and then a gradual return to positive growth in 2021,” says Federal Reserve Bank of San Francisco President Mary Daly.
Federal Reserve Bank of St. Louis President James Bullard, by contrast, is a bit more of an optimist. “There is no reason it can’t come back in a ‘V’ shape,” Bullard says. “I know it’s become popular to say that is not going to happen. I think it can happen.”
Supporting Bullard’s optimism is the central bank’s commitment to effectively do…
