Fiscal Policy And Sentiment Support Toppish Equity and Credit Markets

By Peter Checchini

30 July 2020

In this paper we discuss:

1. Why we expect a U/W-shaped recovery for the economy and markets;
2. The new form of liquidity trap we found ourselves in;
3. What type of “fiscal dominance” we are experiencing at the moment;
4. How risk-asset markets are not correctly pricing the coming explosion in defaults; and
5. The market implications of all the above.

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Download PDF: R&RwC – Money Supply, Fiscal Policy and Asset Prices – July 2020