Jurrien Timmer, Director of Global Macro, notes that, from a markets perspective, the week leading into the inauguration was quiet. The global financial crisis stimulus acted as a tailwind for Barack Obama’s presidency, and Jurrien believes Biden will see a similar tailwind from the COVID-19 stimulus. President Joe Biden has a 1.9 trillion-dollar stimulus plan that should pass because of the “blue wave.” A weakening U.S. dollar makes sense, given all the fiscal and monetary stimulus we’ve seen, and neither Yellen nor Jerome Powell at the Federal Reserve (the Fed) is afraid to push some buttons to get things done. Jurrien believes policy will remain very accommodative and that the Fed will not raise rates or taper off its asset purchases.
Recorded January 18, 2021.