Review the latest Weekly Headings by CIO Larry Adam.
The unprecedented emergence of the COVID-19 virus brought a whole lot of cooks to the policymaker kitchen, as the Federal Reserve and Congress whipped up a plan from scratch (as there was no existing recipe!) to help the US economy avoid the worst-case scenario and to provide stability for the markets. But even after the emergency rush ended, the all hands on deck approach remained as policymakers crafted a course of monetary and fiscal stimulus to further aid the economy’s recovery. The collective response was anything but a flash in the pan, as the US economy was within reach of pre-COVID GDP levels by the end of the first quarter, the equity market reached record highs and credit spreads returned to pre-outbreak levels. With the economy now cooking with gas, the continuance of unprecedented fiscal spending and quantitative easing has led to concerns that the economy may overheat.
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