Wanted: policy action

A decisive and coordinated policy action is key to combat the economic fallout from the coronavirus outbreak. Mike explains why.

Fears about the coronavirus and its hit to the economy have rattled stocks and sent government bond yields to record lows. Even a surprise 0.5% interest rate cut by the Federal Reserve did little to calm the jitters. The material uncertainties related to the outbreak is giving public health officials a strong incentive to act aggressively to mitigate its human toll. But these public health measures, though temporary in nature, slow economic activity, sometimes drastically. We believe this will eventually set the scene for a strong rebound in economic activity, but a decisive policy response is needed to safeguard economic fundamentals.

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Πηγή: blackrockblog.com