Bank of America’s top U.S. economist on Thursday warned that the country is now in a recession in a note to investors.
CNBC reported that Michelle Meyer wrote in a letter to the company’s clients that the U.S. economy is in a “deep plunge” brought on by the global coronavirus outbreak, which has sickened thousands across the country and more than 200,000 globally.
“We are officially declaring that the economy has fallen into a recession … joining the rest of the world, and it is a deep plunge,” Meyer reportedly wrote. “Jobs will be lost, wealth will be destroyed and confidence depressed.”
Meyer did add that while “the decline is severe, we believe it will be fairly short lived.”
The solution to the economic slowdown, she continued, was aggressive economic stimulus action taken in the next few weeks.
“When it comes to the policy response, there should be no upper bound for the size of stimulus, in our view,” she reportedly wrote.
Meyer’s warnings are some of the direst yet about the state of the U.S. economy, which has seen record stock losses over the past few days as markets react to both the outbreak as well as an ongoing dispute between Russia and Saudi Arabia over oil prices and the rate of production.
President Trump admitted Monday during a press conference that the U.S. “may be” headed toward recession but downplayed the risks to the stock market.
“It may be,” Trump said when asked if the U.S. was headed towards an economic slump.
“I think there’s a tremendous pent-up demand both in terms of the stock market and in terms of the economy,” he added. “Once this goes away, once it goes through and we’re done with it, I think you’re going to see a tremendous surge.”