The coronavirus and the economy
The coronavirus is the beginning of the new crisis.
These days only the coronavirus matters, but from the economic centers the problem is being mistakenly addressed.
Coronavirus is a health problem, where there are still no specific medications and where the population suffers from lack of information, and therefore a little panic.
And since the Fed has made a move that is to lower the price of money. According to the EDF for the coronavirus.
But the solutions to the pandemic must be medical. And by restoring confidence and eliminating panic, people will return to their normal life.
Maybe we will see some Holy Week parties where there are many fewer trips and the tourism sector is affected, hotels, airlines, bars, etc., will be harmed but it is that other sectors will be benefited, video games and television will enjoy more users .
What has the Fed done at this time? Perhaps they are beginning to see US economic data that is beginning to be bad, Markit’s composite PMI for the month of February of 49.6 indicating contraction, sales of vehicles and trucks less than expected. This should worry the Fed. But the problem is that the Fed does not have much more ammunition since it did not practically reduce the purchase of bonds and its balance is already very high.
In my opinion, bad employment data in the US is inevitable in the coming months. Against this crisis of the coronavirus, it is fought by giving confidence immediately, if distrust is stopped, employment data will start to be bad and we will be in recession. The re-election of President Trump is at stake.
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