“The time for monetary stimulus is over” by Blackfort CIO Dr. Andreas Bickel

The time for monetary stimulus is over! At least for now. It won’t repair disrupted deliver chains. At the ECB press conference, it was clearly stated that a synchronized fiscal stimulus is needed.

In the US the president tries to cut taxes on wages, but in the parliament he gets stopped and most believe that this won’t be very effective. The best would be to give all residents directly money into their pockets like Hong Kong has announced.

On the other hand, a global coordinated action plan to stimulate the economy with a reduction of tariffs and trade barriers accompanied with fiscal stimulus would be a very effective way to overcome the actual stand still.

But so far countries just look for themselves or even accuse others for their problems. As the US is not going to lead like in the past and the Europeans are not even able to coordinate among the Eurozone there is little hope for such actions.

Nevertheless, in Asia we see that the number of new infected people is stagnant. China stimulates its economy in all possible ways. Consequently, Asian corporates and equites have outperformed the rest of the world.

Source: Linkedin

Published: 13/03/20 by Blackfort CIO Dr. Andreas Bickel

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