Deficits be damned Yellen to call for more stimulus to bolster economy The Financial Times reports that Treasury Secretary Nominee Janet Yellen, the Federal Reserve’s former head, will state that the US risks a more prolonged recession and long-term scarring if it does not inject more government spending into the economy. The prepared remarks obtained by the FT ahead of Ms Yellen’s testimony today outlined that Ms Yellen feels that with interest rates at historical lows, now was the time to “act big,” with the benefits outweighing the challenges of a larger deficit. With US markets mostly closed for a public holiday, Asian markets appear to have seized on Ms Yellen’s remarks as further vindication for President-elect Biden’s USD1.90 trillion stimulus package. And as we know from 2020, any mention of stimulus is usually good for asset prices. That seems to be the case in Asia, with most equity markets across the region opening up much stronger.