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St. Louis Fed's Bullard: Negative Interest rates would be 'problematic' in U.S.

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St. Louis Fed President James Bullard joins Yahoo Finance’s Alexis Christofourous, Brian Sozzi and Brian Cheung to discuss why he believes negative interest rates are not a clear remedy for the coronavirus-induced economic crisis in the United States, despite market bets on below-zero rates next year.

Video Transcript

ALEXIS CHRISTOPHOROUS: Italy, Germany, Spain, and France are among the European countries beginning to ease restrictions amid the COVID-19 outbreak. And the daily growing number of confirmed cases is starting to slow. There are now over 4.12 million confirmed cases worldwide, which has resulted in 283,000 deaths. Here in the US, we now have 1.3 million confirmed cases of the virus, and we are closing in on 80,000 deaths.

I want to bring in Dr. Kass, Dr. Dara Kass for more on this. She is Yahoo medical contributor and Columbia University associate professor of emergency medicine. Dr. Kass, good to see you again. You know, I was reading over the weekend a whole bunch of news about a possible vaccine. Johnson & Johnson's chief scientific officer said it is unlikely the virus will be eradicated without a vaccine. We know J&J is expected to start a human trial for a vaccine at some point in September. How realistic is that?

DARA KASS: So I think that the eventual vaccine is realistic. The timeline to get one is what we don't know. What J&J announced was the ability to produce a billion vaccines starting next year if we actually find a vaccine that works. But remember, there are a lot of steps between the idea of a vaccine and the production of a vaccine. I think the idea is similar to making a million or a billion flying cars. We don't have the technology in place yet to do it. But when we do have the vaccine, it will be very, very helpful to be able to produce them at scale.

- Dr. Kass, my Twitter feed has been filled with photos from the reopening of Disney Shanghai. It looks like people are social distancing, but could this be pulled off successfully here in the US? Some of the photos I have seen from there, it looks like people are enjoying the park like normal and not social distancing.

DARA KASS: So I think that that's actually one of the encouraging things we like people to think about is, what could we achieve if we put testing and tracking in place and if we really put the breadth of American exceptionalism into solving the health care crisis, right? If we have robust testing and tracking, we can start opening certain places like parks eventually and really rebound sustainably for the economy. But without-- we can't skip this step. We know that China and South Korea have put in very robust testing and tracking and have addressed the virus at its core before they actually got to Disney Shanghai.

ALEXIS CHRISTOPHOROUS: Doctor, over the weekend, the FDA issued emergency approval for a new antigen passed from a company called Quidel. A former head of the FDA is calling it a game changer. It's supposed to be faster, cheaper, simpler to use. But I guess the question we all have is, is it accurate? What are your thoughts on that antigen test?

DARA KASS: So antigen testing is going to be central to our ability to robustly reopen and engage quicker than just the PCR testing. But we know for a fact antigen testing, which tests a different piece of the virus, can be done on site very quickly, rapidly, and at scale. It's just not accurate. So a lot of times for high-yield viruses, we actually repeat a PCR, the one we're using now, all the time to confirm whether or not the virus is actually absent, whether it's a true negative test.

So I think that it's very exciting, the antigen testing. A lot of companies are actually working on antigen testing. So we'll see very soon-- much like the antibody tests, we'll start seeing more and more companies announce the ability to actually produce this antigen test, and that's encouraging. The one that comes out as the most accurate and the most sensitive will probably be the one that we'll lean on the most.

ALEXIS CHRISTOPHOROUS: And lastly, I want to ask about sports. So many people want to see sports back up and running. Baseball should be going on right now. And we found out over the weekend that fewer than 1% of MLB employees have tested positive for COVID-19 antibodies. What does that mean for the timeline to reopen baseball?

DARA KASS: Well, I think that all sports need to be looked at as a risk ratio. So which sports are lower contact and better-- honestly, scaleable for viewing? If we're looking at it as an economic opportunity, as an opportunity for people to engage, it might be tennis or golf that we start with first and not baseball.

But I think that what it means is we're very far from this concept of herd immunity or natural infection and recovery. If only 1% of baseball players have antibodies, that means that they didn't get the infection, which is actually really good. But it means that we're going to have to continue to be smart about tracking and tracing and protecting them from ongoing infections before we just decide to reinstate the baseball season.

ALEXIS CHRISTOPHOROUS: A lot of work still to be done. Dr. Dara Kass, thanks as always. Be well.

DARA KASS: Thank you so much.