IN THIS ISSUE:
1. Overview: 2020 Economy Worst in 74 Years
2. Worst Economic Slowdown Since World War II
3. Fed Again Promises to Keep Rate Near Zero… But
4. President Biden’s Policies to Cost Millions of Jobs
Overview: 2020 Economy Worst in 74 Years
We’ll touch on several bases today. We start with the latest news from the Commerce Department which just released its initial estimate of 4Q economic growth (or lack thereof). 2020 goes down as the worst economic year since the end of World War II.
The Fed policy committee met last week and again pledged to keep the Fed Funds rate near zero indefinitely and will continue its monthly purchases of Treasury bonds and mortgages. However, the large gap between the Fed Funds rate and the 10-year Treasury Note remains worrisome. Something’s gotta give, as I will discuss below.
Finally, while President Biden promises his climate change-oriented economic policies will result in millions of new jobs over time, he is obliterating millions of US jobs in the first weeks of his presidency. Whether it’s the Keystone XL Pipeline, halting new oil and gas drilling on federal lands or his climate change initiatives, he is killing millions of US jobs at a feverish pace. Without getting too political, I think all Americans should be aware of what is happening with Biden’s ‘stroke of the pen’ Executive Orders.
2020: Worst Economic Slowdown Since World War II
Last Thursday the Commerce Department released its first estimate of 4Q Gross Domestic Product showing the economy grew at an annual rate of 4.0% in the final three months of last year. That followed the 3Q record expansion of 33.4% (annual rate) as the economy rebounded strongly following the COVID-19 lockdowns.
2Q GDP plunged by a record-shattering 33.4% (annual rate) following the 1Q slide of 5% in the first three months of the year. For all of 2020 the economy shrank by 3.5%, the worst annual decline in 74 years (WWII).