How long a shutdown can governments afford?

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If a return to work is organised after the three-month stage, there will be some rebound, but economies will not spring back into full output immediately.

The Central Banks have responded quickly and with great force to the crisis. Led by the Fed they have produced huge amounts of cash to keep markets afloat, rescuing the government bond trades from illiquidity and fear and helping inspire a rally elsewhere. The governments have now appeared with substantial fiscal packages, recognising that only they can give money to people and companies to make up some of their losses as they stay at home, unable to work. The two are operating together, as well they must. Central Banks pledge to keep interest rates low, and governments promise to borrow eye-watering amounts to keep damaged economies turning over.

View Full Article – published by Charles Stanley on 8th April 2020