July 14, 2020 / 6:38 PM / 21 days ago

Fed's Bullard: "Granular" health policy critical to avoid a worse downturn

FILE PHOTO: St. Louis Federal Reserve President James Bullard speaks at a public lecture on "Slow Normalization or No Normalization" in Singapore May 26, 2016. REUTERS/Edgar Su

(Reuters) - The coronavirus pandemic has proven to be a “more persistent” threat to the U.S. economy than initially expected, and a more “granular” health strategy including ubiquitous mask usage is needed to avoid a possible economic depression, St. Louis Federal Reserve president James Bullard said on Tuesday.

Bullard said his base case is that the economy continues to grow in the second half of the year and build off of the surprise increases in employment in May and June.

But “the downside risk is nevertheless substantial, and better execution of a granular, risk-based policy will be critical to keep the economy out of depression,” Bullard said.

As an example he pointed to estimates that near universal mask usage would continue lowering death rates, and that businesses can one by one learn how to more safely operate.

Reporting by Howard Schneider; Editing by Andrea Ricci

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