According to the Federal Reserve Bank of Dallas President Robert Kaplan. He thinks there’s potential for gross-domestic-product growth of roughly 17% in the third and fourth quarters of this year. He made these comments while conducting a phone interview with news service Reuters.
The regional central bank chief said a lot of the rebound is riding on increasing testing for COVID-19. He believes that by identifying and isolating infected individuals, it will allow for more people in this country to resume their “normal” routines.
He also believes the testing process would cost far less than the vast resources that have been committed to the current rescue of the financial system and the economy. Already, the government has invested roughly $6.6 trillion with talk of spending at least another $3 trillion on rescue plans.
Kaplan feels that increased testing would provide the impetus for explosive growth in the second half of 2020. He anticipates the unemployment rate will exceed 20% in the second quarter. But he believes there’s potential it could fall back to 10% by year’s end and 7% by the end of 2021.
This is similar to recent commentary from Fed Chairman Jerome Powell and St. Louis President James Bullard. Both believe the domestic economy has seen the worst of this downturn. They also think it’s already rebounding. They also expect the rate of growth to accelerate in the second half of this year.
Robert Steven Kaplan has served as the thirteenth president and CEO of the Federal Reserve Bank of Dallas since September 8, 2015
