NewsWatch: Fed’s Bullard says there is ‘good news’ for those worried about the economy’s future: that universal COVID-19 testing will help restore economic health

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There is “good news” for those who think the U.S. economy will have a tough time recovering from the coronavirus pandemic, said St. Louis Fed President James Bullard, on Sunday.

“There is a solution using available technology today to fix the economic part,” Bullard said, In an interview on the CBS News program “Face the Nation.”

That solution? Universal testing.

Bullard laid out a system where every American would be tested every day and would wear a badge with their negative result, similar to the ones people wear after they vote.

This would help the economy because people “could interact with each other with a lot of confidence,” he said. And the health-care sector would be able to bring care quickly to those in need.

Last month, Bullard made headlines for publishing research suggesting the U.S. unemployment rate might soar above 30%.

During his CBS interview on Sunday, Bullard repeated that the coronavirus-era job losses shouldn’t be compared with those during any past economic recession because it is the result of a request from the federal government: Stay home to invest in the health of the country.

“In principal, this is an understandable situation. We do not want people to go back to the basketball games. We do not want people to get on planes while this disease is ravaging the economy,” he said.

Read:Bullard compares economy to a car slowing down for construction zone

The sharp increase in initial claims for state unemployment insurance over the past two weeks is good news in the sense that Americans will get the government transfer payments they need, he added,

Most of the impact of the shutdown in economic activity will be felt in the second quarter, Bullard said.

The third legislative relief package passed by Congress, estimated to allocate around $2.5 trillion in new spending, is about the right size to assist Americans who have lost jobs and income, Bullard said. The challenge now is to get that assistance into the right hands.

U.S. equity benchmarks show how concerned investors are about the outlook. The Dow Jones Industrial Average DJIA, -1.68% is down 26% in 2020, while the S&P 500 index SPX, -1.51% is down 23%.