Wall Street rallies, investors focus on recovery and ignoring the bad news.
The US economy could start to recover in 2-H of this year after what looks to be the worst recession in decades, growth may be slow and uneven, some Fed policymakers hinted Tuesday.
Their soft assessments came as a majority of US states began or moved toward reopening their economies, locked down for weeks to slow the spread of the C-19 coronavirus.
President Trump is pushing a reboot of economic activity to mend household and corporate balance sheets in the face of the fading disease threat. Vice President Mike Pence, meanwhile, said Tuesday the White House could disband its coronavirus task force by the end of May.
“We are living through the most severe contraction in activity and surge in unemployment that we have seen in our lifetimes,” Fed Vice Chairman Clarida said in an interview Tuesday.
VC Clarida said he is hopeful the Fed can limit lasting damage to the economy, adding that it is “in the range of possibility” for the economic recovery to start in 2-H of the year once businesses reopen and people return to work.
The Fed has pared interest rates to Zero+, and promised to keep them there until the economy returns to better health, bought trillions of dollars of bonds and rolled out a suite of emergency lending facilities meant to keep credit flowing to businesses and households.
Meanwhile, Wall Street investors have been in rally mode since the Key reversal on 23 May and continue to look forward 6-12 month ignoring the bad news, the market knows America is charging ahead and is the world’s economic leader.
Remember this, always take what the market gives.
Have a healthy day, Keep the Faith!