Monetary and Fiscal Stimulus At a Peak?

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Monetary and Fiscal Stimulus At a Peak?

 

Weekly balance sheet data from the World’s major Central Banks show aggregate liquidity growth slipping a tad to 16% (3m ann.).

Western economies remain lacklustre, although encouragingly there are few signs of deterioration despite the recent lockdowns.

Liquidity provision soared to record highs in 2020 and there is more in the pipeline for this year – we estimate some US$6tr.

Recent policy actions suggest that policy makers sense this may be enough, especially when historically high fiscal provision is added to the mix.

The current stability in the liquidity data reflects this stance. That said, Central Bankers have made clear in recent policy statements that they stand ready to increase liquidity provision beyond what is already in the pipeline, if needed.

 

 

 

 

 

See our latest published research, Weekly Global Liquidity Update 26 February 2021

 

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