Last week the US voted through Joe Biden's $1.9trillion stimulus plan. Now perhaps very many of you will be wondering why we care so much about the United States of America? Of course the simple answer is it matters because they are the worlds largest economy [an economy that in 2021 is very much inter connected as the virus has shown] and this is nearly TWO TRILLION dollars!
Politically it is quite interesting because it definitely shows a shift to the left in US politics [the plan just wouldn't have passed otherwise] but unlike many economic stimulus plans that typically involve liquidity measures that typically involve central bank rate control and/or direct market action in fixed income markets in this round of stimulus there will be direct payments to Americans.
The checks will be a maximum of $1,400 per individual, or $2,800 per married couple, plus $1,400 per dependent.
Like past direct payments, this third round will be based on income.
The income limits for those to receive the maximum amount will remain the same. Individuals who earn up to $75,000 in adjusted gross income, heads of household with up to $112,500, and married couples who file jointly with up to $150,000 will get the full $1,400 per person.
Last year the Federal Reserve had signalled a major shift in its approach to managing inflation, as it tried to do more to aid the US economy's recovery.
The central bank will now target an "average" of 2% inflation, rather than making 2% a fixed goal, giving it more flexibility, boss Jerome Powell said.
The intent was to allow the bank to keep interest rates lower for longer, stimulating growth to help tackle unemployment.
In Europe, where Germany is the senior partner, inflation is a very sensitive issue because of the history of Germany. The bond buying program of the ECB was in focus just last week as Bundesbank President Weidmann called on all European countries, not just Germany, to restore their public finances.
“But all member states of the monetary union, not just Germany, will need to get their budgets in order after the crisis. In the euro area, it is particularly the — in some instances — very high debt ratios that must be brought back down reliably,” he said.
Yet as we went through the weekend we see headlines of virus spiking across Italy, Germany and Eastern Europe. Add to which a European vaccination roll out that is in turmoil and the AstraZeneca vaccine suspended in at least nine countries worldwide, including Ireland, Denmark, Norway and Iceland, over safety concerns.
Check Please.....you won't be hearing that for a while as it seems 2021 Summer holidays just got cancelled.