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Fed Officials Warn of Risk of Widespread Business Failures

  • Bullard sees possible depression if shutdowns are prolonged
  • Kashkari says recovery from crisis will be ‘gradual, muted’
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Watch: Federal Reserve Bank of St. Louis President James Bullard says a prolonged economic lockdown risks triggering bankruptcies and a Depression-scale recession.(Source: Bloomberg)
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Federal Reserve officials warned the virus outbreak and a partial shutdown of the U.S. economy would result in a decline in the current quarter of historic proportions and risk the potential of massive bankruptcies that could create a lasting scar.

“You will get business failures on a grand scale and you will be taking risks that you would go into depression” if shutdowns persist, Federal Reserve Bank of St. Louis President James Bullard said in a video speech from that city Tuesday.