A Federal Reserve official predicts unemployment could hit 30% in the second quarter as businesses close to stop the spread of the coronavirus.
Additionally, Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News the second quarter will likely see a 50% drop in gross domestic product as well.
Bullard said the Fed needs to respond strongly to replace $2.5 trillion of lost income, saying "everything is on the table." The Fed has already bought back debt and made more money available to businesses.
Bullard said: “The overall goal is to keep everyone, households and businesses, whole ... It is a huge shock and we are trying to cope with it and keep it under control.”
When will the economy recover? Bullard said the third quarter will be "transitional" while the final quarter of 2020 and the first quarter of next year will be "quite robust." The Fed official told Bloomberg News that's when Americans will be making up for lost spending.
Contains footage from CNN.
Correction: A previous version of this story incorrectly said a Federal Reserve official predicted the unemployment rate would hit 30%. The official said the unemployment rate could hit 30%. This story has been updated.