Politics vs Economics: What Politicians Misunderstand About Markets
Many Happy Returns
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The Effect of Fiscal Policy on Bond Returns
We're in a kind of odd situation where we expect the central bank to pick up the pieces when there's a recession. The only thing the central bank can do is affect interest rates and maybe QE as well, money printing. But what the government can't do is affect supply. And they can do that via their fiscal plans, how much they spend. That would have been much more powerful if the two had worked in tandem. We've got stimulative plans from government at the same time as central banks are trying to put the break on the economy.
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