Via Bank of America:
Fiscal: look out below
In the face of the shock from the COVID-19 pandemic, fiscal stimulus has poured into the economy. Washington has pushed in roughly $2.8tr of stimulus, equaling 13% of GDP while the Fed has expanded its balance sheet to $7.1tr. The rapid and forceful support on the policy front likely limited the downside during the recession and has helped to support the ongoing recovery. But we are now approaching a few “cliffs” which would prove painful if unaddressed. We see four areas of concern:
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