English
French
German
Italian
Russian
Spanish
US can orchestrate soft landing through fiscal stimulus – Piper Sandler
US can orchestrate soft landing through fiscal stimulus – Piper Sandler By Investing.com
Breaking News
‘;
AuthorVahid KaraahmetovicStock Markets
Published Feb 28, 2024 07:26AM ET
© Reuters. US can orchestrate soft landing through fiscal stimulus – Piper Sandler
Analysts at Piper Sandler said in a Monday note that the US could orchestrate a soft landing through fiscal stimulus measures such as student loan forgiveness, tax cuts, and more defense spending, among other things.
According to analysts, the absence of conventional growth drivers in the economy means that avoiding a recession could necessitate fiscal generosity.
“In order to have a soft landing in 2024, additional fiscal stimulus would be needed (such stimulus definitely kept the economy stronger, longer in 2023),” analysts said.
Analysts outlined several fiscal measures the government could opt for to accelerate economic growth in 2024.
These include more student loan forgiveness, distributing grants under the CHIPS Act, and the recently proposed Wyden-Smith tax cut deal.
In addition, Piper Sandler also listed Employment Retention Credit (ERC) payouts and the $95 billion defense bill which has recently passed the Senate, and now awaits House action.
If the aforementioned steps come to pass, it could translate to an additional 1.5% boost to GDP from fiscal stimulus this year, analysts said.
“If all the above come to pass, it would take our 2024 real GDP forecast from -1% to +0.5%, and keep worst case unemployment below 4.5%, saving roughly 1.5m jobs,” they wrote.
“A confirmed soft landing would be good for (nominal) earnings, and in turn stocks,” analysts added.
One potential downside of this strategy is that it could hinder the Federal Reserve’s ability to lower interest rates given the robust economic environment it would create.
US can orchestrate soft landing through fiscal stimulus – Piper Sandler
Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information
© 2007-2024 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
