Special Episode: Recovering from the Stimulus
Thoughts on the Market
Morgan Stanley
4.8 • 1.4K Ratings
🗓️ 7 May 2020
⏱️ 8 minutes
🧾️ Download transcript
Summary
How can we best coordinate policy to support a timely recovery and what lessons can we learn from the past? Chief Global Economist Chetan Ahya and Chief Cross Asset Strategist Andrew Sheets discuss the policy path back from the global economic crisis brought on by COVID-19.
Transcript
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| 0:00.0 | Welcome to Thoughts on the Market. |
| 0:04.0 | I'm Chetanaya, Chief Economists for Morgan Stanley. |
| 0:07.0 | And I'm Andrew Sheets, Chief Cross Asset Strategy |
| 0:09.0 | at Morgan Stanley. |
| 0:10.0 | And on the special two-part edition of Thoughts of the Market, |
| 0:12.8 | we'll be talking about the impact of the coronavirus pandemic |
| 0:15.9 | on the global economy and the effect on markets longer term. |
| 0:19.4 | It's Thursday, May 7th at 11 a.m. Eastern time. |
| 0:23.0 | Chayton, we're now several months into this pandemic and we've seen governments |
| 0:27.6 | around the world meet the challenge with what you've called a full court policy |
| 0:32.1 | press to support economic activity. Maybe it's self-evident, but why do you think the market cares so much about the aggregate level of debt, especially when borrowing costs are so low. |
| 0:43.7 | They're some of the lowest we've ever seen in history. |
| 0:46.6 | And then also around the deflation issue, |
| 0:48.8 | you know, why do you think markets are worried about lower prices or falling prices when again I think some |
| 0:56.2 | actors could see that as not that big of a problem at all. |
| 0:59.3 | Historically we've had the problem of high inflation so whenever we've had high deficits you've |
| 1:05.2 | seen higher inflation however you know the experience that we've seen over the last |
| 1:10.5 | few years in the US and developed world. I'm of the view that we have to be actually |
| 1:16.2 | concerned about the disinflationary pressures and not the inflationary pressures. So the |
| 1:20.8 | hogs that you hear are really talking about this being an issue because they are coming in from the point of view that inflation is an issue. |
| 1:29.0 | However, we think the real issue is disinflationary pressure. |
| 1:32.0 | So we are watching more policy action to be taken up to support |
... |
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