He warned that the massive amounts of monetary and fiscal stimulus rolled out by the world’s central banks have caused debt to skyrocket. Stocks may have gotten overvalued as well in the process. As a result, he sees a “serious risk of a looming global financial crisis as central banks begin to shift away from [the] easy (monetary) policy at some point in the years to come.”
Is more stimulus needed?
In the U.S., some economists are actually calling for more stimulus with no concern for how high the federal deficit has gotten, while others are sounding the alarm for rising debt levels.
By some measures, the pandemic-driven recession is over in the U.S. (although some disagree), but economists from Moody’s Analytics say that without more stimulus, the nation could tip back into a recession in the fourth quarter or during the first quarter of next year. Mark Zandi of Moody’s sees “better than even” odds that the economy backslides if lawmakers don’t work together to pass another round of stimulus. On the other hand,
