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Integrated Insights - Week of July 27, 2020

Integrated Insights - Week of July 27, 2020

| July 28, 2020
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More stimulus is coming--and is necessary to continue to stave off financial crises on Main Street. It looks like Washington will take their time working out the details.  This is important, as some of the initial programs to combat the abrupt shutdown of the national economy in March were arranged haphazardly.  The second round of stimulus should be more intentional as the debt around this crisis becomes more layered.

Weekly Commentary -- Real resilience in sustainability -- BlackRock

  • The tectonic shift toward sustainability is gaining pace. BlackRock highlights an underappreciated climate-related risk to portfolios: water stress.

  • Negotiations have kicked off over the size and make-up of a new U.S. fiscal package as key benefits are set to expire and states face budget shortfalls.

  • U.S. consumer confidence is in focus this week as the fiscal cliff nears and the pandemic’s spread in Sunbelt states is starting to affect economic activity.

The Challenge of Low Interest Rates Across the Developed World -- Capital Group

While controlling interest rates is important, the Fed is relying on a robust set of tools during this crisis. These include:

  • Forward guidance: Telling the market to expect more stimulus in the future

  • More quantitative easing: Expanding its balance sheet to buy assets

  • Additional liquidity facilities: They may introduce additional such measures, perhaps targeting specific sectors that are facing the greatest stress

  • Encouraging banks to lend: They may use their authority to encourage otherwise reluctant banks to extend credit

  • Average inflation targeting: An explicit willingness to let inflation rise above its 2% target for a period of time, since it may be below target during another period

Social Distancing Recovery Dashboard -- Cetera Investment Management 

Cetera Investment Management has launched a weekly dashboard to track a variety of measurements of economic activity.  

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