St. Louis Fed President James Bullard told Yahoo Finance on Monday he is optimistic about the U.S. economy returning to strength by the end of 2020.

“I'm hopeful that we'll have a good transition in the third quarter and we'll get back to pretty close to normal by the fourth quarter,” Bullard told Yahoo Finance.

Bullard said most of the negative impact will be reflected in GDP figures “way outside of anything that the U.S. macroeconomy has ever experienced,” adding that the unemployment rate will rise higher than the already eye-popping 14.7% figure released on Friday.

But after that, Bullard said “you’ll probably see the best growth number that you’ve ever seen as well.”

The St. Louis Fed chief pointed to historical examples in the 1918 and 1957-1958 influenza pandemics, adding that both events were followed by some of the “greatest decades that we’ve ever had.” Bullard said there is no link between pandemics and macroeconomic performance.

“It’s a health tragedy and a human tragedy,” Bullard said. “That part is clear, but as far as a macroeconomic tragedy, that doesn't have to happen.”

Bullard also pointed to China’s experience with the coronavirus, arguing that he could see China experiencing a sharp rebound in GDP for the second quarter. The Chinese economy contracted by 6.8% in the first quarter of 2020 compared with the year earlier.

Bullard said the outcome in the U.S. will still depend on getting the virus under control, which he said would require widespread testing across the economy. Bullard said Congress and the White House should direct any “further fiscal action” towards funding coronavirus testing.

Congress is currently working through proposals for further fiscal relief, including one Democratic proposal that would extend unemployment benefits for the duration of the pandemic. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides an extra $600 per week in unemployment compensation but only through July 31.

Bullard said the $2.3 trillion was a “well-sized” response to the crisis, pointing specifically to the unemployment insurance program.

“We’ve had a good response both at the Fed and by the Congress and political leaders,” Bullard said. “We put a lot of money on the table.”

For the Fed’s part, Bullard said the central bank is still prioritizing the use of its liquidity programs to avoid a financial crisis and an economic depression. The central bank has unleashed nine liquidity facilities ranging from U.S. dollar funding to cheap loans to medium- to large-sized businesses.

The Fed’s next policy-setting meeting will take place June 9 and 10.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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