This week brought several pieces of optimistic news. President Biden officially signed the new stimulus bill into effect, Fed Chairman Jerome Powell offered encouraging news on economic growth and interest rates, and many major cities continued to accelerate reopening efforts.
Stimulus Package – President Biden officially signed the American Rescue Plan of 2021 into law. The $1.9 trillion stimulus package provides $1,400 stimulus checks for qualifying Americans, extends unemployment benefits through September, and provides additional funding for housing assistance. While many experts are concerned that a relief plan of this magnitude will lead to future inflation, White House Press Secretary Jen Psaki stated that “The risk of doing too little to help American families outweighed the risk of doing too much”. In the near-term, additional money in the pockets of consumers, paired with a re-opening economy, bodes well for many industries.
Federal Reserve – Federal Reserve Chairman Jerome Powell announced that The Fed has ramped up its expectations for economic growth, increasing GDP growth projections, and decreasing unemployment estimates. Additionally, Powell indicated that The Fed anticipates inflation slightly above 2% in the near-term, with the rate settling in around 2% in subsequent years. The Chairman also indicated that there are no interest rate hikes likely through 2023, despite the improving outlook.
Economic Re-Opening – Many major cities are beginning to fully embrace the economic re-opening, as New York announced many changes, including:
Restaurants opening up to 50% capacity
Baseball stadiums opening at 20% capacity
Live concerts beginning April 1st
Additionally, Las Vegas casinos increased capacity from 35% to 50% this week. These re-openings offer increasing opportunities for the American public to put their stimulus checks to work.
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