COVID-Impacted Sectors Recovery Outlook
Situation Overview
▸ Economy has made substantial progress towards the Fed's employment and
inflation targets
Economy is likely to experience a significant boost as we fully emerge from the
pandemic, which is not yet reflected in employment and inflation figures
Government has provided an unparalleled level of economic stimulus during the
pandemic and is likely to provide additional stimulus
$5.1tr of stimulus since the beginning of the pandemic (~25% of GDP)
■ Future infrastructure and "Build Back Better" spending may be $2tr to $3tr (10% to 15% of GDP)
▸ Fed funds rate at historically low levels
► Current Fed policy is to begin tapering shortly but wait on raising interest rates
until further evidence of progress on employment and continued inflation
A "wait and see" approach to raising interest rates creates significant risks given
the substantial progress to date on employment and inflation combined with the
unprecedented economic backdrop
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