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.
“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.
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.