Global Economy: Fiscal Policy

Our Market Optics chartbook contains data-driven insights that power our portfolio management teams’ views, ideas, and decisions. Each week, we’ll take a look a closer look at one of the charts.

This week’s topic: Global economy: Fiscal policy

Global economy: Fiscal policy
  • When the pandemic hit, the fiscal policy response was uniformly big and bold. The U.S. showed that despite high budget deficits, there was plenty of appetite for more government debt.
  • Some of those programs are sunsetting, but consumers have accumulated a lot of savings and we could see consumer spending stay buoyant as individuals transition back into the labor force.
  • Will the high levels of debt with expanding central bank balance sheets be long-term inflationary? We’re not too worried about it, yet. No historical example is perfect, but for developed markets, governments seem to have a lot more capacity to expand their debts than most people think.

Originally Posted on August 27, 2021 – Chart of the week: Global economy: Fiscal policy

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