The headlines make the situation seem like a curiosity.
For investors, Wall Street analysts, and even some financial journalists, the reality of the damage to the economy, several weeks after the initial round of fiscal support expired, may indeed seem like a spectacle.
But it’s not that way for millions of Americans out of work or struggling to pay the rent or buy food in the wake of this year’s coronavirus pandemic.
It may not need saying that the longer the economy goes without another financial aid package, the worse the situation may become. But some analysts increasingly think it will also soon start to make an impact where it cannot be ignored: in the financial markets.
“Stimulus is the wrong word for this,” said David Rosenberg, a long-time strategist now running his own firm, Rosenberg Research. “This not classic Keynesian stimulus. It’s a lifeline to get us through. The stimulus has become what the Phase One Trade deal was last year.”
Week after week, roughly 800,000 Americans file for first-time jobless benefits, the springtime Congressional stimulus money has run out, and things are generally growing more dire for businesses and households, Rosenberg thinks. “If they don’t pass some sort of bill quickly, how many businesses will go under, how many missed payments will we see on rent, debt service, and utilities? The next few months are really critical. I’m quite amazed that there’s quibbling over a hundred billion dollars here and there with so much at stake.”
See: Yes, the U.S. economy really does need more fiscal stimulus – and the stock market knows it
It’s important to note that Rosenberg and other analysts do believe that some sort of stimulus package will be enacted eventually. And so does the stock market, which has been gravitating toward areas investors