mercredi 7 octobre 2020

Can central banks keep holding off the Covid economic crisis? | Mohamed El-Erian

Donald Trump said talks on a stimulus package are off – and the problems will only get worse

Having long been buttressed by ample liquidity, financial markets are entering the final quarter of 2020 amid an increasingly tentative global economic recovery, unusual political uncertainties and lagging fiscal and structural policy responses. And these headwinds come on top of the Covid-19 crisis, which has left most countries struggling to strike a balance between protecting public health, achieving a return to a semi-normal level of economic activity and limiting infringements on individual liberties.

In this context, the hope is that today’s generous liquidity conditions, enabled and supported by central banks, will continue to provide a bridge to a better 2021, not only reversing the economic and social damage but also delivering further gains to investors. But will this bridging operation, already deployed for several years to compensate for other headwinds, be sufficient to overcome what is an increasingly complex pandemic cocktail?

Related: Why are stock market prices rising despite the Covid pandemic? | Kenneth Rogoff

The longer the delay, the greater the problems that any future package will have to address

Continue reading…

source https://www.theguardian.com/business/2020/oct/07/central-bank-covid-donald-trump-stimulus-package



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