下一轮刺激法案依然是上爆的一个重要Catalyst
Washington holds the key to the next big move in equities, as additional fiscal and monetary stimulus are needed to sustain the rally through the winter.
The potent combination of unprecedented government spending and hyper-expansive monetary policy that got stocks through the first wave of the pandemic, will again be the key to navigating the next wave.
So far, the U.S. government enacted $2.9 trillion of fiscal stimulus (15% of GDP). The Fed has cut rates to near zero, and initiated a program of unlimited asset purchases; its balance sheet has grown by 70% this year and is now at 33.5% of GDP. The Fed has indicated a willingness to do more if needed, but much will depend on what is done on the fiscal side. It is not coincidental that the FOMC leadership has been so vocal in calling for additional government support.
There is now a sizable, $2.2 trillion proposal on the table from Congressional Democrats. But if recent history repeats, the proposal probably won’t see the light of day. And without both fiscal and monetary support, further equity upside will be tough to achieve.
Washington holds the key to the next big move in equities, as additional fiscal and monetary stimulus are needed to sustain the rally through the winter.
The potent combination of unprecedented government spending and hyper-expansive monetary policy that got stocks through the first wave of the pandemic, will again be the key to navigating the next wave.
So far, the U.S. government enacted $2.9 trillion of fiscal stimulus (15% of GDP). The Fed has cut rates to near zero, and initiated a program of unlimited asset purchases; its balance sheet has grown by 70% this year and is now at 33.5% of GDP. The Fed has indicated a willingness to do more if needed, but much will depend on what is done on the fiscal side. It is not coincidental that the FOMC leadership has been so vocal in calling for additional government support.
There is now a sizable, $2.2 trillion proposal on the table from Congressional Democrats. But if recent history repeats, the proposal probably won’t see the light of day. And without both fiscal and monetary support, further equity upside will be tough to achieve.