Central banks and governments have unveiled an estimated $15 trillion of stimulus already to shield their economies from the coronavirus pandemic - record sums that will swell balance sheets and deficits to peacetime highs.
FILE PHOTO: The Charging Bull or Wall Street Bull is pictured in the Manhattan borough of New York City, New York, U.S., January 16, 2019. REUTERS/Carlo AllegriShaken by turmoil on financial markets in March, with their economies heading into freefall and a decade of job creation wiped out, policymakers have seized upon tool after tool to rescue their economies - including taboo policies such as cash handouts and buying ‘junk’ bonds.
The $15 trillion covers the “G10” group of major economies plus China, where total stimulus is harder to track. In reaching that number, Reuters has included the increase in central bank balance sheets since the crisis erupted, new government cash injections and spending pledges, as well as about $7 trillion worth of quasi-fiscal loan and credit guarantees. Much of the latter may never be drawn upon, which would reduce the size of the fiscal stimulus.
Central banks will also buy more bonds, with some saying there is no cap on purchases, inflating the $15 trillion number between now and end-2020.
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