More Fiscal Stimulus?

July 20, 2020

More Fiscal Stimulus? Photo

The choppy reopening process across the U.S. continues despite the increase in coronavirus cases. The varying realities of the pandemic depending on the region and business type have created significant differences in economic impact. Monetary and fiscal stimulus has helped support the economy to this point. This week, the discussion about additional fiscal stimulus will pick up momentum in Washington. Given the current state of the pandemic, I expect a deal to be reached in early August that will provide more support for consumers and businesses.

Considering the challenges with managing the pandemic and the reality that a truly effective vaccine or therapeutic is unlikely before very late this year, the additional fiscal stimulus is needed to support consumers and small businesses. The Federal Reserve’s easy monetary policy will continue to support asset prices in markets for the near term but fundamentals will drive long-term valuations.

Tags: Coronavirus | Monetary stimulus | Fiscal stimulus | Federal Reserve

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