The Fed’s Monetary Animal House, appearances can be deceiving. Most major stock indexes are up double-digit percentages year to date, implying significant economic growth and a booming outlook for businesses, workers, and households.
Economic activity is well off the lows seen in April and May. The same data also suggests we are nowhere near the same level of activity seen pre-COVID. To quote New York Fed President John Williams, “
we are still in a profound recession”-12/2/2020.
Is the economic rebound real and durable, or a false positive supported by record levels of artificial stimulus? Does current investor confidence hinge on more trillion-dollar stimulus agreements? Although we have our suspicions, we won’t know the answers for quite some time.
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