The scale of US stimulus is so enormous that the US Federal Reserve will be forced to change tack sooner rather than later.
It will have to start tapping the brakes to prevent overheating and to counter ever louder talk of an incipient inflation supercycle akin to the late 1960s.
If it does not signal an intent to do so, bond vigilantes will take steps to protect themselves against stealth expropriation.
That will be disorderly and much worse.
Fed’s M2 measure is up 25.7pc over the last year, the highest since Roosevelt’s war economy.
Households are sitting on $1.4 trillion of excess savings.
Ambrose Evans-Pritchard Telegraph 23 February 2021
The Bank of England estimates that with the savings rate as high as 26.5pc of disposable income at one stage last year, households accumulated an excess stock of savings of around £125bn between March and November, a number which is bound to have risen further still since then
Negative rates are not going to persuade people and companies to spend and invest what they don’t already have but targeted tax cuts or even Biden-style handouts just might.
Jeremy Warner, assistant editor of The Daily Telegraph, 24 February 2021