Markets Buoyed on Extra 1Trillion Dollar Stimulus
Published / Last Updated on 17/06/2020
US President, Donald Trump is planning to spend 1 trillion dollars on infrastructure projects to stimulate economic growth. In addition, the US Federal Reserve has said it will start to buy back goverment bonds (quantitative easing) to release yet more liquidity into markets.
In addition, the Federal Reserve also confirmed it would be investing more into a 'corporate bond' fund. In short, lending money, buying debt from large companies looking to raise money.
After the announcements, FTSE 100 rose to 2.5% as global stock markets also surged.
Comment
Expect more of the same from Europe and the Far East over the next few weeks. The Office for National Statistics is due to report on inflation this week and the Bank of England Monetary Policy Commitee also convenes to make decisions on any further interest rate reductions or fiscal stimulus too.
Government and central banks will not 'stand still' when it comes to stimulus in a post coronavirus economy.