FX.co ★ US unlikely to avoid deep recession

The coronavirus pandemic has hit every country in the world. However, not every economy will be able to spread its wings. Analysts are concerned about the US economy as many other economies somehow depend on it. In 2008, problems caused by the Lehman Brothers bankruptcy led to the global crisis. That is why a new recession in the US economy may cause even deeper troubles. Last time, despite the unprecedented package of stimulating measures and the Fed’s ultra-Orthodox policy, the US needed approximately six years to make unemployment bounce back to its pre-crisis level. During the pandemic crisis, the real income of people will nosedive whereas credit opportunities will be limited. All these facts may lead to a recession. At the moment, the US markets are recovering. However, it is an unpredictable reaction after a record drop. The US authorities are considering easing some restrictions. However, the key sectors of the economy will still be damaged by the pandemic. The fact is that once the quarantine ends, the US citizens will hardly visit restaurants as well as shopping centers and sporting events. Besides, it is unlikely that people will start travelling and companies will make investments in production and increase the number of employees. That is why the US and other countries should be ready to face the crisis and do their best to prevent it.