After a dismal second quarter, depressed by the economic impact of the Covid-19 outbreak, the nation is poised for unprecedented growth this fall, says the President of the Federal Reserve at St. Louis.
James Bullard is predicting not just a strong 2020 third quarter, but one of the “best quarters ever for economic growth in the U.S.”
Bullard made his prediction on CNBC’s interview program Closing Bell, noting additionally that the recession caused by the pandemic and subsequent national economic shutdown, was most likely officially over by early summer.
Earlier this month, a panel of 35 forecasters surveyed by the Federal Reserve predicted that the economy in the third quarter will expand at an annual rate of 19.1%, significantly up from earlier forecasts of 10.6 %.
Bullard also forecast additional growth for the final quarter of this year, as well as the first four months of 2021.
Bullard’s remarks followed on the appearance of Federal Reserve Chairman Jerome Powell, who spoke before an economic policy symposium in Jackson Hole, Wyoming, and said that an inflation rate above a targeted 2% might be manageable for the time being as the county moves out of a recessionary economy.
But Powell was quick to add: “We have not changed our view that a long-run inflation rate of 2% is most consistent with our mandate to promote both maximum employment and price stability.”
As a means of supporting a more robust economy, the Federal Reserve has now formally embraced an “average inflation targeting” policy, meaning that for the time being it will allow inflation to run marginally above the desired 2% goal.
That approach has won the unanimous backing of the Federal Open Market Committee, which serves as the policymaking arm of the Federal Reserve.
By Garry Boulard
