US stimulus to push GDP above pre-covid trend by mid-2021 – Bloomberg Economics

The US covid relief package is large enough to drive the country’s gross domestic product (GDP) above the pre-coronavirus pandemic trend by mid-2021, the latest analysis published by Bloomberg Economics showed.

In response to the fiscal aid, the US GDP growth could be seen in the vicinity of 7.4% for the full year on a 4Q-over-4Q basis, the best since 1983. Still, the level settles toward the prior trend by the end of 2022, according to the study.

The House of Representatives passed the much-awaited $1.9 trillion stimulus bill, including the measure to increase the minimum wage to $15, on Saturday.

Market implications

The stimulus optimism has joined the encouraging vaccines news, fuelling the risk-recovery while downing the safe-haven US dollar across the board.

The S&P 500 futures rally 1% to regain 3,850 levels.