Fed warns stock market of a second recession if the coronavirus pandemic isn't brought under control

[Zorro]

Before this latest spike in cases, some Fed officials saw ‘a substantial likelihood of additional waves’

The Federal Reserve is a lot more worried about the economy than the stock market or the president are. Officials and staff economists at the Fed caution that a second wave of recession could sweep over the country later this year if the coronavirus pandemic isn’t brought under control, according to a lengthy summary of the Fed’s policy meeting held on June 9-10.

The consensus forecast of Fed policy makers calls for a gradual recovery in the economy over the next several years, but the minutes of that June meeting released on Wednesday indicate that a more pessimistic projection was judged as “no less plausible than the baseline forecast,” by the staff economists who work up the most detailed (but classified) forecast of the economy.

It’s all going to depend on the health of the American people. The meeting took place before the latest surge of infections that have derailed or delayed plans to further open up businesses in several states.

The stock market, however, has broadly shrugged off those infections. The S&P 500 index SPX, +0.50% rose 0.5% on Wednesday after surging 20% in the second quarter, which ended Tuesday.

The minutes indicate that a surge like the one that’s now taken hold in many states was a major downside risk that was discussed behind the closed doors of the Fed in early June.

https://www.marketwatch.com/story/fed-warns-stock-market-of-a-second-recession-if-the-coronavirus-pandemic-isnt-brought-under-control-2020-07-01

[ck4829]

1. Oh, a recession inside a recession... inrecession

[nilram]

4. Sounds better than the D-word

[Awsi Dooger]

2. Somehow we've reached an excellent unlikely combination

Trump approval falling simultaneous to stock market maintaining. I wouldn't have believed that possible at the beginning of the year.

I'm fully accepting of a market drop that will be another dagger to Trump

[sfstaxprep]

3. Bad News Like This Will Only Cause Market To Go Up

I predict a rally because of this.

[empedocles]

5. The market 'up bounces' seem pretty fragile and limited. Time will tell.

[uponit7771]

7. +1, DOW futures up 200 ... lofl, they're not even trying to hide

[uponit7771]

6. DOW going up on more vaccine lies, anyone taking a quick made vaccine for a CV19 is brain dead