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IPFS News Link • Economy - Recession-Depression

Never Before Has So Much Stimulus Been Injected In The Economy In A Single Quarter

•, Tyler Durden

ack-to-back strong monthly gains in retail sales in May and June and a powerful rebound in the equity markets in Q2 create the impression the recession is over. But the recessionary environment is only delayed, hidden by the record amount of fiscal and monetary stimulus that has postponed layoffs, spending cutbacks, bankruptcies, and business failures and operating losses.

The pandemic crisis is unique in that it involves public health, finance, and economics. An all-out policy package of fiscal and monetary stimulus helped finance recover and the economy to rebound. However, a pandemic-driven recession runs on its own timeline and is unaffected by the scale of stimulus. The new wave of COVID cases could quickly trigger a shift in investor sentiment from optimism to pessimism as the rebound in corporate earnings is postponed.