Don’t believe all the bad news you hear—here are a few glimmers of hope buried under fearmongering headlines.

Don’t get spooked by negative headlines that are cropping up in the media regarding the coronavirus’s impact on the economy.

For example, Goldman-Sachs forecasts the largest drop in the GDP in almost 100 years. It sounds like the end of the world!

Though the headline is true, it doesn’t reflect the full story of the forecast. The projection is actually that we will have a tough first half of the year, which we’re already experiencing but also that the economy will bounce back nicely come the second half of the year. They also project that the GDP will increase by 12% in the third quarter and around 10% in the fourth quarter.

This aligns with some research from Byrnes Consulting regarding past pandemics’ impacts on the economy. They’ve concluded that pandemics are usually V-shaped, which means they’re characterized by sharp recessions that recover quickly, and they don’t deal much damage to home prices. Essentially, the economy will suffer for the next few months, but then it will begin to recover.

“The economy will bounce back nicely come the second half of the year.”

James Bullard, the president of the Federal Reserve Bank of St. Louis, recently predicted a 33% unemployment rate due to the pandemic. What he actually meant was that it could reach that point; in the same interview, he said that this was a planned, organized, partial shutdown of the U.S. economy in the second quarter.

Bullard also said that the overall goal is to keep everyone—households and businesses—whole with government support. He went on to say that we would see the third quarter as a transitional quarter, and the fourth quarter and the first quarter of next year as quite robust.

When quarantine measures loosen and the economy starts to open up again, people will be well ready to start spending again, and as businesses reopen, some jobs will come back and people will have money in their pockets.

The bottom line is that there’s a lot of misinformation out there. If you want the best advice on what’s happening in the current market, reach out to me. I’d be glad to keep you informed.