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The Pandemic in Retrospect: Nightmare + Comeback Thumbnail

The Pandemic in Retrospect: Nightmare + Comeback

Pandemic Retrospective

In terms of equity returns, the last fifteen months proved to be one-fifth nightmare and four-fifths wonderment as capital markets and the global economy staged an astonishing comeback from a devastating, COVID infused rout.  The chart below illustrates some of the key milestones since December 31, 2020:

Chart: COVID-19 Pandemic Retrospective

The boxes outlined in red highlight the major legislative and Federal Reserve actions taken over this period.  These combined with a series of smaller actions over the last fifteen months provided an astonishing COVID response, as detailed below (dollar figures tallied by the Committee for Responsible Federal Budget):

Legislative Action - $5.95 trillion in spending and tax breaks authorized by Congress.  $3.6 trillion has been committed or disbursed to date.

Federal Reserve Action - $5.98 trillion available for asset purchases, liquidity measures, loan programs, lending facilities and interest rate & reserve requirement changes effected by the Federal Reserve.  $2.9 trillion has been committed or disbursed.

Between Congress and the Federal Reserve, $6.5 trillion has been committed or distributed thus far, leaving another $5.4 trillion available in the unlikely scenario economic conditions deteriorate from here.  Add in President Biden’s proposed $3 trillion, 10-year infrastructure plan and the economy has significant policy support for quite some time.  Such support will add to the deficit, the mounting national debt and taxes, all things we are keeping a close eye on.  


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