A high-pressure growth gamble

Biden administration's mega-stimulus could set off a tug of war between growth and inflation and a churn in the markets

The US has just passed an additional $1.9 trillion fiscal stimulus, taking its total spending to counter the pandemic to $5 trillion. What’s more, it will not stop there. Already there are plans to put in place another large fiscal programme targeting green energy, infrastructure and education. Seemingly unfazed by warnings that the stimulus will cause an overheating of the economy and spur inflation, the Biden administration seems determined to push through it. It has to get the US back to full employment before the midterm elections in 2022, and will do whatever it takes to achieve this. Having learnt