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The Capital Spectator: Investments, Asset Allocation, and Economics Insights


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In the lead-up to the coronavirus outbreak, inflation rates in the United States were relatively stable according to conventional metrics. However, recent macroeconomic developments aim to address the significant economic disruption caused by Covid-19. The Federal Reserve has implemented a policy of unlimited asset purchases alongside an aggressive monetary approach, while the federal government is poised to introduce a new $2 trillion stimulus package. Collectively, these measures represent one of the most extensive economic interventions ever made. But could this extraordinary initiative set the stage for escalated inflation in the future?

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        <p>The $2 trillion economic stimulus package in the US is expected to be signed into law today: <a href="https://www.politico.com/news/2020/03/25/senate-vote-coronavirus-rescue-package-deal-148135">Politico</a><br/>What key provisions are included in this extensive relief bill? <a href="https://thehill.com/homenews/senate/489575-7-things-to-know-about-the-coronavirus-stimulus-package">TH</a><br/>Pressure mounts on Trump for government assistance in boosting ventilator production: <a href="https://www.bloomberg.com/opinion/articles/2020-03-24/ford-ge-3m-ventilator-mask-push-needs-government-intervention">BBG</a><br/>Anticipated spike in jobless claims reported in today’s numbers: <a href="https://www.reuters.com/article/us-health-coronavirus-usa-layoffs/u-s-braces-for-record-surge-in-jobless-claims-amid-coronavirus-fallout-idUSKBN21D0FS">Reuters</a><br/>What are the implications of Trump’s wish to reopen the US economy by Easter? <a href="https://www.cnn.com/2020/03/25/business/economy-recession-coronavirus-trump-easter/index.html">CNN</a><br/>Could future coronavirus immunity be a possibility? <a href="https://www.nytimes.com/2020/03/25/health/coronavirus-immunity-antibodies.html">NY Times</a><br/>Economic paradigms have shifted dramatically due to the pandemic: <a href="https://www.bloomberg.com/news/articles/2020-03-25/economies-already-look-totally-different-from-the-pre-virus-age?srnd=economics-vp">BBG</a><br/>Consumer confidence in Germany sees a significant drop: <a href="https://www.actionforex.com/live-comments/282777-germany-gfk-consumer-climate-dropped-to-2-7-lowest-since-2009/">AF</a><br/>Durable goods orders in the US increased in February, though the impending impact of the virus remains a concern: <a href="https://www.marketwatch.com/story/durable-goods-orders-surge-in-february-on-strong-demand-for-autos-but-the-coronavirus-crunch-is-coming-2020-03-25">MW</a><br/>The trend in world trade showed a deeper decline in January: <a href="https://www.cpb.nl/en/worldtrademonitor">CPB</a></p>




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The far-reaching disruptions caused by the coronavirus pandemic are evident to all; however, the economic forecasting models are just beginning to capture the extent of damage inflicted on what was a steadily growing US economy. Due to delays in economic data, which can take two to three months to materialize, previously reliable methods for assessing macroeconomic trends have quickly become outdated. Nonetheless, the reality is rapidly aligning with these earlier optimistic projections.

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        <p>Congress and the White House reached an agreement on the $2 trillion coronavirus relief package: <a href="https://www.cnbc.com/2020/03/24/coronavirus-updates-congress-gets-closer-to-a-deal-on-massive-stimulus-bill.html">CNBC</a><br/>Trump aims to reopen businesses by Easter: <a href="https://www.cnn.com/2020/03/25/health/coronavirus-state-actions-wednesday/index.html">CNN</a><br/>US Composite PMI for March indicates severe economic contraction: <a href="https://www.markiteconomics.com/Public/Home/PressRelease/7bf04abd12954a8581c25bc4d9f5e93a">IHS Markit</a><br/>New survey suggests German economy may shrink by 20% this year: <a href="https://www.reuters.com/article/us-germany-economy-ifo/german-economy-could-shrink-by-as-much-as-20-this-year-due-to-coronavirus-ifo-idUSKBN21C15E?il=0">Reuters</a><br/>Global economy struggles as the virus spreads, according to survey data: <a href="https://www.bloomberg.com/news/articles/2020-03-24/europe-dragged-into-record-recession-in-battle-to-halt-virus?srnd=economics-vp">IHS Markit</a><br/>US stocks recorded their largest gain since the Great Depression on Tuesday: <a href="https://www.forbes.com/sites/sergeiklebnikov/2020/03/24/heres-why-stocks-just-had-their-best-day-since-1933/#2faf7f851b40">Fortune</a><br/>Gold prices surge, with Goldman Sachs predicting further rises: <a href="https://www.marketwatch.com/story/goldman-sachs-says-it-is-time-to-buy-gold-the-currency-of-last-resort-2020-03-24">MW</a></p>