The risk to the size of the stimulus bill is so asymmetric it’s maddening. Assume it’s 3T or $4T. What’s the risk? After living through this cycle, worrying about a bond market crash or non linear inflation versus mass unemployment and a depression is beyond insane, it’s cruel.
We should be so lucky to have 2.5% inflation and a 2.5-3% 10 year. It would mean things are relatively normalish.
And if you worry about runaway inflation your brain has been eaten by worms. The Fed has very capably proven over the last 40 years they can halt inflation at will.
And if you worry about runaway inflation your brain has been eaten by worms. The Fed has very capably proven over the last 40 years they can halt inflation at will.
Core PCE hasn’t been above 2.5% since 1993. What is the risk to going too big? Seriously? If not inflation, what is the risk to a monetary sovereign?
Q4 2008 saw nominal GDP fall 7.3% at annualized rate. Estimates for Q2 2020 are around 14% decline. 2x the decline of the worst quarter of the financial crisis! Goldman is predicting a decline in the 20s.
These numbers are so big people aren’t comprehending the devastation.
These numbers are so big people aren’t comprehending the devastation.
Another way to think about it. The decline in a nominal dollars in Q4 2008 was $275B. Q2 2020 is going to be $750B or more. Yes the economy is bigger today, but not big enough to withstand that kind of sudden economic loss.
