Economists and CIOs believe fears central bank and government stimulus measures to fight the economic effects of Covid-19 will lead to an inflationary shock are overdone.
One of the defining features of the coronavirus pandemic has been the sheer scale of the policy reaction as global lockdowns shut economies for months on end and pushed many countries into recession. Fiscal stimulus measures in the US and the European Union, for example, added up to around 13% and 4% of GDP respectively as of 24 July 2020, according to Statista.com. This surge in government borrowing and growing central bank balance sheets has caused an acceleration in money supply growth, according to global head of asset allocation at Invesco Paul Jackson. US M2 growth, for insta...
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