Stimulus Update: How Stock Market Will React
Yesterday we highlighted the massive Bazooka the Fed Fired at Markets. A $900 billion injection of cash into the economic system in the form of direct payment cheques, small business protection, unemployment benefits, and vaccine distribution.
U.S. jobless claims jumped back to their highest level in three months and are trending back in a worrying direction. The pandemic is surging in many areas and is compounding the disparity between the economic crisis and the stock market exuberance.
The Fed said they will keep interest rates near zero and keep buying bonds until the U.S. reaches full employment and inflation settles at 2%. However, with the amount of stimulus being injected into the economy, there is no factual data saying these new monetary policy tactics will work.
Watch the full video for a breakdown of how the stimulus package will affect the economy and maybe, more importantly, your investments in the stock market.
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