Fed's Bullard: Massive business failures would increase chance of depression risk

The shutdown policy was appropriate during the initial phase of the coronavirus pandemic but it cannot be sustainable over time, argued St. Louis Federal Reserve President James Bullard said on Thursday.

"Massive business failures would increase the chance of depression risk but base case is they will be avoided," Bullard added. "We are not out of the woods yet but we are hopeful that April was the worst of economic crisis."

Bullard further noted that he thinks that the economy will recover faster than it did from the 2008-09 crisis depending on the virus.

Market reaction

The US Dollar Index largely ignored these comments and was last seen gaining 0.4% on the day at 97.45.