Why is trillions in spending needed to combat the economic downturn of the coronavirus? The answer is in the difference between fiscal aid and stimulus and the lessons learned from the policy response to the 2008 financial crisis. … READ MORE >
Economics
CHART OF THE DAY: West Coast container activity suggests an end-of-year pause in the recovery
Import activity at West Coast ports continues to anticipate robust consumer demand despite rising prices and the first hint of a pause caused by the resurgence in the coronavirus at the end of the year. … READ MORE >
U.S. precautionary savings and the coming economic expansion
Savings by American households have soared to $1.1 trillion above their long-term average from 1965 to 2020. That excess savings and near-term policy decisions around fiscal aid and stimulus will play a large role in determining the shape, scale and duration of what we expect to be the coming economic expansion. … READ MORE >
U.K. financial conditions, growth and the pandemic
Despite a surge in new cases of coronavirus infections in England, the RSM UK Financial Conditions Index remains 0.1 standard deviations above neutral as investors focus on what is expected to be a strong economic rebound this year. We expect growth to expand at 4.2% this year and 7% next year. … READ MORE >
FOMC preview: Addressing market rise in inflation expectations
The January meeting of the Federal Open Market Committee this week presents the central bank with an opportunity to reinforce its forward guidance, which is most likely not going to change for years. … READ MORE >
China’s economic power: You may not like it, but you cannot ignore it
China’s importance in global trade continues to grow, and so many countries have become dependent on China that global economies do not have the option of ignoring it. … READ MORE >
Inflation-adjusted interest rates, investment and the middle market
A confluence of events and policy shifts has coalesced into a unique opportunity for middle market firms to make long-term strategic investments in their firms. Interest rates, once adjusted for inflation, reside in negative terrain. … READ MORE >
First-time jobless claims remain elevated
Initial jobless claims declined to 900,000 for the week ending Jan. 16, down from 965,000 the week before but well above the pre-pandemic high established in 1982. … READ MORE >
CHART OF THE DAY: Major economies to bolster spending in 2021
Pandemic-induced fiscal operations and monetary accommodation have pushed nominal and real policy rates into negative terrain, while aid to offset lost jobs and income has soared into the trillions around the G-7 economies. … READ MORE >
Biden outlines next round of fiscal aid
President-elect Joe Biden put forward an ambitious $1.9 trillion fiscal aid plan to address the public health crisis, the damage caused to the economy by the pandemic and the rollout of a national vaccination program. … READ MORE >