White House To Hold Meeting To Discuss Economic Stimulus

Shortly after we spoke about a prediction from Goldman's David Mericle that the government and/or the Fed will need to immediately step in with monetary and fiscal stimuli to try and manage the recent chaos in the markets, VOA's Steve Herman reports that the White House will be holding a meeting to discuss economic stimulus later this afternoon.

Economic stimulus meeting to held here at the @WhiteHouse after @POTUS returns this afternoon, according to officials.
— Steve Herman (@W7VOA) March 9, 2020

Trump, meanwhile, is blaming an oil-driven spat between Saudi Arabia and Russia - not coronavirus fears - as "the reason for the market drop!"

Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!
— Donald J. Trump (@realDonaldTrump) March 9, 2020

Good for the consumer, gasoline prices coming down!
— Donald J. Trump (@realDonaldTrump) March 9, 2020

To review some of the options on the table, according to Goldman:

Beyond funding for virus testing and treatment, the most direct avenue is aid to corporates and small businesses, especially in sectors hit by the virus shock. A US precedent is the post-9/11 help for the airline industry, which involved $5bn in direct payments and up to $10bn in loan guarantees.

Another avenue—at least in the US where the central bank is very limited in what it can legally buy—is for the Treasury to backstop credit easing facilities for the Fed; however, it would probably take a material further deterioration in market conditions and functioning for such facilities to be reestablished.

On the Fed side, Goldman expects easing in March and April, with 100bp on the table. That said, it may have limited impact given where rates already are.

So far there's been virtually no reaction to news of the meeting.

Commenti

Post popolari in questo blog

Charting the World Economy: The U.S. Jobs Market Is On Fire - Bloomberg

Charting the World Economy: The U.S. Jobs Market Is On Fire - Bloomberg https://www.bloomberg.com/news/articles/2019-12-06/charting-the-world-economy-the-u-s-jobs-market-is-on-fire Charting the World Economy: The U.S. Jobs Market Is On Fire Zoe Schneeweiss Explore what's moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast , Spotify or Pocket Cast . The last U.S. payrolls report of the decade was a doozy, beating expectations and doing its bit to keep the consumer in good health heading into 2020. That's good news given the various pressures still weighing on global growth. Here's some of the charts that appeared on Bloomberg this week, offering a pictorial insight into the latest developments in the global economy. U.S. Advertisement Scroll to continue with content ...

Continua a leggere

Another Paradox: Consumer Spending Expectations Surge, Despite Dismal Income, Earnings

Call it the latest economic paradox. Despite widespread stories of doom and gloom about the state of US consumer finances once the fiscal stimulus bill expires on Dec 31, the latest NY Fed survey of consumer expectations unexpectedly shows that US consumers have little intention of slowing down their spending. In fact, and very paradoxically, despite depressed and flat income and earnings growth expectations, with median one-year ahead expected earnings growth at 2.0% for fifth consecutive month and expected income growth barely little changed at 2.14% ... ... consumers' 1-year ahead spending growth expectations jumped to 3.73% over the next 12 months in November - the highest level in more than four years, not only up from the 3.06% in the previous month but a whopping 33% more than the 2.8% reported last November, making this the biggest Y/Y increase in expected spending in series history. This bizarre increase took place even as labor market signals were mixed: although t...

Continua a leggere

China Exports, Imports Fall Sequentially, Adding To Slowdown Fears

China's exports rose 19.3% y/y in July, missing the median consensus expectation of 20% (ranging from 15.4% to 30.7%), and declining sequentially -0.3% in July after rising +5.7% in June. Imports also rose less than expected, up 28.1% Y/Y in July, below the 33.3% median expectation, and fell 6.4% sequentially after surging +11.3% M/M in June. As a result this disproportional slowdown in imports vs exports, China's monthly trade surplus actually rose to $56.6bn in July, slightly better than the $53.3BN consensus, and up from $51.5BN in June due to the bigger miss in imports. ASEAN was China's biggest trading partner in July, followed by the Europe Union and the U.S., customs data showed. China's exports to the US grew 13.4% in July from a year ago, while imports from America rose 25.6%, leaving a trade surplus of $35.4 billion in the month. Some more details: By geography: Export growth slowed across major export destinations, and exports to major DMs continued to be a ...

Continua a leggere

Faber News Flow

Cerca nel blog