Complex Event Analysis - Report
Key Focus
A record-breaking fiscal package and $6 trillion Fed balance sheet underscore the U.S. These important programs may keep a cascading network collapse from being even worse.
The U.S. Federal Government and the Federal Reserve have moved at a rapid pace to provide massive economic support to the U.S. economy as it deals with the economic damage from the COVID-19 global pandemic.
The fiscal response is a record-breaking $2 trillion economic support package, while the Fed has added almost $2 trillion to its balance sheet, taking it to nearly $6 trillion (or 30% of GDP)This will be a phase of assessing the severity of the financial distress and making adjustments. There are parts of the economic support packages that address these challenges, especially the Fed's support of the mortgage market, money market funds, primary dealers, and central bank swap facilities.
The Next Phase
We need to note, though, that loans, asset purchases, and temporary paycheck support programs are bridges to allow consumers and companies to stay afloat and come out the other sideWe have disruptions in supply chains, transportation, tourism, consumer demand, etc., that feed on themselves.
Read More: Policy Analysis Through the Lens of Phase Transitions
Many of the measures introduced by the Fed and the federal government, such as loans to companies and paycheck replacement programs are aimed at containing the damage from the cascading network collapseMomentum supporting factors
(economic, next_phase) (economic, mortgage)Challenge supporting factors
(collapse, economic) (cascading, economic) (economic, network_collapse) (economic, gaseous)Work-in-progress supporting factors
(economic, fed) (collapse, economic) (cascading, economic) (economic, record-breaking) (economic, keep) (economic, global) (economic, gdp)