Market Talk – Monday, March 29

Net Lending to Individuals increased from 2.6B to 4.9B

US/AMERICAS:

Federal Reserve Governor Christopher Waller spoke critically of the government for increasing the deficit, stating that the Fed’s decision to maintain interest rates is not a signal for the government to add to the deficit. “Monetary policy has not and will not be conducted for these purposes,” Waller stated, “It is simply wrong.” Government debt has surpassed $4.5 trillion, almost a 20% increase, since the pandemic began in March of last year. Estimates from the Congressional Budget Office stated that debt would fall to $2.3 trillion in 2021 but failed to include the recent $1.9 trillion stimulus package. Waller added that Congress is fully aware that the Federal Reserve was created to be independent of government as it could be subject to misuse for political purposes.

The White House announced this Monday that they are conducting an independent study on the origins of the coronavirus. The World Health Organization previously partnered with China to conduct a study that allegedly traced the origins to human contact to infected bats. However, the White House is not ruling out a possible leak from a laboratory in Wuhan, China. The investigation is likely to continue to sour US-China relations.

Nearly 20% of Americans were unable to pay their rent last month, according to the Census Bureau. In response, the CDC announced it would extend its nationwide eviction ban until June 30 to avoid a possible mass displacement. The CDC noted that it would be counterproductive to lift the ban prior to the US government releasing rental assistance, as Congress has already put aside around $45 billion in rental aid. The protections are in place for individuals earning under $99,000 and couples earning under $198,000 annually. However, landlords with less liquidity who do not have access to relief funds are beginning to sell their properties.  As housing and rental costs increase across the US, the possibility for a future housing crisis begins to mount.

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