Stimulatory Measures

Stimulatory measures are typically used by governments and central banks as a package of economic measures put together to stimulate a stagnating economy with the objective being to reinvigorate the economy and prevent (or reverse) a recession by “stimulating” employment and spending.  2020 will certainly be remembered as a year of almost unprecedented economic uncertainty and stock market volatility. Governments and central banks have remained firm in their support to dealing with the economic crisis and have introduced record breaking stimulatory measures to assist in economic recovery, though complete recovery to pre-Covid-19 levels will likely be protracted.

Stimulatory measures are typically used by governments and central banks as a package of economic measures put together to stimulate a stagnating economy with the objective being to reinvigorate the economy and prevent (or reverse) a recession by “stimulating” employment and spending. In the U.S. markets rose in Q3 on the back of continuing facilitating Federal Reserve monetary policy and early signs of a pickup in economic activity. The Federal Reserve will now employ average inflation targeting in setting interest rates which is indicative of prolonged liquidity easing. The provision of additional fiscal stimulus measures remains deadlocked as the parties, Democrats and Republicans, dispute as to the quantum of the stimulus to be provided.