Markets have been buoyed by the huge US fiscal stimulus package announced this week and President Trump’s statement that the US economy should re-open by Easter. For our first exclusive this week we feature top macro thinker Dominique Dwor-Frecaut on the trade-offs between economic growth and containment measures given the likelihood of any vaccine for COVID-19 is well past the feasible limits of shutdowns and continued fiscal stimulus.
For today’s COVID tracker we focus on the data for individual US states where New York has now overtaken Italy on a per capita basis. We also update our US election tracker which shows Trump’s popularity jumping to the highest level since he took office.
We also feature a wrap-up on the policy response to coronavirus across Central Europe from the team at CEEMarketWatch. Similar to other regions, CEE central banks are rapidly to loosening policy, with today’s 75bps rate cut from the Czech National Bank marking the second cut in less than two weeks, and several have now also announced a move to QE.
Finally, we include a response to our Deep Dive published yesterday on demystifying central bank DSGE models. The author (a seasoned practitioner in building such models) highlights how experts try to account for the practical limitations of DSGE models, how the models are not designed to deal with shocks such as COVID-19 and the absence of financial market variables in these models.
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