US fiscal cliff or private boom?

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This debate matters a lot to H2 markets. There was roughly USD5tr in US fiscal stimulus in the second half of last year that won’t happen this year. This is an enormous growth headwind.

But, of course, the private sector economy will be reopening at the same time, providing an enormous catch-up growth tailwind.

Which wins out may well determine how markets fare for the next 6-9 months.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.