Michelle Meyer, a top U.S economist of Bank of America, has shocked the global financial space by laying out a warning note for the investors stating that the U.S is undergoing a recession period triggered by the uncertain situations created by the coronavirus pandemic. The bank has revealed that the US GDP will face a severe downfall of a whopping 12% on a seasonally adjusted annual rate basis in the second quarter. The decline shall be the biggest quarterly collapse in post-war history.
The reports suggest that Meyer wrote a letter to the firm’s client base addressing the current crippling economic scenarios. She conveyed that the U.S economy is presently in a “deep plunge” evolved due to the global coronavirus outbreak, which has given a major jolt to business operations, trading activities, and other economic parameters. The World Health Organization has declared COVID-19 as a pandemic that has enveloped the world population in its deadly tentacles and has led to the spread of infection to more than 200,000 people in different parts of the world.
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“We are officially declaring that the economy has fallen into a recession … joining the rest of the world, and it is a deep plunge. Jobs will be lost, wealth will be destroyed and confidence depressed. The salvation will come if there is a targeted and aggressive policy response to offset the loss of economic activity and ensure a sound financial system.” stated Meyer in his letter. As per the renowned economist, though the decline is severe, it will be only for a short period of the span.
“When it comes to the policy response, there should be no upper bound for the size of stimulus, in our view,” added Meyer.
In a recent interaction with the media, the honorable President of the U.S, Donald Trump, also agreed that the country “may be” heading towards a recession. “I think there’s a tremendous pent-up demand both in terms of the stock market and in terms of the economy. Once this goes away, once it goes through and we’re done with it, I think you’re going to see a tremendous surge,” quoted Trump.
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The pandemic has churned the financial markets while ending the longest-ever bull market situation in history. Serious concerns have been shown by researchers worldwide towards the aggravating scenarios created by the disease outbreak in the U.S and around the world. A huge number of warnings have surfaced in the industry, opining severe damage to the US economy as a direct result of slow consumer activity and economic growth.
