The Federal Reserve Bank of St. Louis leader James Bullard gave an update today. He said that the US central bank policy is in a good place right now following Covid challenges. Regarding the monetary policy, Bullard said “we don’t know what’s around the corner as far as the crisis goes, so all those things make me think that we’re in a good position for now.”
The interest rates are at very low levels which aren’t expected to change much and there is seemingly a significant pace of purchases. He didn’t show much concern towards more stimulus because of the larger first round of fiscal stimulus which is still helping the economy. He also thinks that there is more improvement still coming with the unemployment rate. He said unemployment, which is currently at 6.9%, “could fall to between 4.9% and 5.5% by year-end, depending on when workers are called back.” Unfortunately, Bullard didn’t give any insight into possible policies going forward, but he noted that central bank and government aid have been effective during this Covid economic shock.
I agree with him that policies and aid thus far have been effective. I am not sure that I agree with stimulus being unnecessary at this point because many people and many businesses are still facing serious hurt. Do you agree or disagree with Bullard’s statements? What possible economic events do you think are coming our way that could change our current economic position?
Derby, M. S. (2020, November 13). Fed's Bullard Says Economy Has Recovered Faster Than Expected. Retrieved November 13, 2020, from https://www.wsj.com/articles/feds-bullard-says-economy-has-recovered-faster-than-expected-11605274229
3 comments:
I don't think stimulus should stop anytime soon because even with a vaccine and very low COVID rates, there are still going to be those struggling in the job market due to rapid technology advances. Also, even though our economy has shown growth for a little bit now, there's still a large wave predicted to hit again. This will hurt our economy again.
I think stimulus checks are still important, but not as important as they were at the beginning. A lot of people have returned to their jobs as businesses have opened up more. However, people are still not making as much as they were or cannot work as many hours, so the checks would help in that sense. Maia brings up a good point about a possible second wave. If this happens I am worried for the state of our economy in general. I do like the signs of growth for now though.
I really don't think that that the economy is good enough to stop sending stimulus checks especially with what looks like another lockdown or some more intense regulations that will definitely hamper the economy's growth. The growth indicators of the economy are definitely a sign of hope but it does not mean it will continue without intervention
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