JEPI - Investing In The Post-Pandemic World - An Update

• The financial markets are anticipating the end of the pandemic as a result of the successful vaccine trials.
• Comparisons involving the post-WWII period and the coming post-pandemic period may be useful.
• The federal budget deficit will exceed $3 trillion yearly in 2020-2021, and debt-to-GDP ratios are approaching the prior WWII-induced peak.
• During WWII, the surge in federal government spending was for defense-related goods and services. The pandemic-related federal government spending was mostly for transfer payments.
• The gap between actual GDP and potential GDP will likely close very quickly in the post-pandemic period. In contrast, that gap lasted until 2018 after the 2007-09 recession.

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