- ANALYSIS: Despite steady growth, Washington’s current fiscal trajectory has economists asking why policymakers are acting as though the U.S. is facing a downturn. In an exclusive interview with Fortune, Moody’s Analytics chief economist Mark Zandi said that while the White House may be aiming to lift sentiment ahead of midterms, the Fed fears rising unemployment and political blowback if America enters a recession. Macquarie’s head of economics, David Doyle, also speaking exclusively to Fortune, warned that this stimulus could fuel overheating by 2026 if inflation rebounds. Both experts noted that while the current package supports growth, the widening gap between low unemployment and soaring deficits poses questions about the viability of America’s debt.
At the onset of the coronavirus pandemic, the U.S. government approved record-breaking spending bills totaling $5 trillion in a bid to keep businesses afloat, people employed, and the economy from tipping into recession. Five years on, and somehow, the American economy has not only avoided a contraction but has managed to grow—an outcome many investors thought impossible.
