Stock market next week: Does the U.S. economy need another $ 480 billion in stimulus?

“It ‘s harder now to argue [that] the Fed needs to move forward with these emergency support measures, ”Andrew Hunter, a senior economist at Capital Economics, told me.

On the cover: Most Fed observers agree that news of the bond purchase in Jackson Hole is unlikely, although President Jerome Powell’s speech on Friday will be closely monitored. Instead, they think the Fed will formally announce its plans to start reducing bond purchases in September, with the change starting before 2022. (Although the Delta variant remains a major unknown).

The Federal Reserve has launched only two large-scale asset purchase programs in its history: one after the 2008 financial crisis and one in response to the pandemic. This makes it difficult to determine how the financial markets and the real economy will respond.

There are some concerns about the fact that financial markets may panic. The memory still comes from the “tonic rage” of 2013, when the Fed’s announcement that it would eventually curb asset buying sparked a strong bond market sell-off.

“There is always the possibility of short-term turmoil,” said Randall Kroszner, who served as governor of the Federal Reserve from 2006 to 2009.

But that recovery looks very different from what followed after the financial crisis, according to Michael Skordeles, US macro-strategist at Truist Advisory Services.

“Going through a lot of industries, things seem very strong,” he said. “It wasn’t like that in 2013.”

Even then, the short-term shock of the markets had little effect on the real economy, Kroszner said. Even if interest rates rise slightly as the Fed changes course, it is likely to remain very close to historic lows.

The hope is that by starting to take a step back this year, the Fed will be able to retreat smoothly without causing too much fuss.

“Starting earlier allows them to do it even more gradually,” Skordeles said.

For employers, these are vaccination mandates versus labor shortages

At Kevin Smith’s home care agency in Massachusetts, only 52% of his 400 staff members have been vaccinated. He would like to order everyone to receive the shot, but says he can’t risk a mass exodus.

“It puts you at risk of alienating staff, if not losing them to a competitor,” said Smith, who has run the family-owned Best of Care since 2013. “No one can “That’s why any entrepreneur in our industry is so reluctant to impose a mandate.”

Step backwards: employers are facing a record number of jobs and there are not enough candidates. This puts companies that might otherwise consider the need to get vaccinated in a tight spot, writes my CNN business partner Chris Isidore.

Among unvaccinated workers who asked what they would do if their employer instituted a mandate, 50% said they would quit their jobs, according to a June survey by health policy think tank KFF.

The problem: a higher inoculation rate is exactly what experts say we need to fight the pandemic, and there is pressure on employers to play a bigger role.

The Equal Employment Opportunity Commission said employers have the right to impose a vaccination warrant as long as there are exceptions for employees with legitimate health conditions or religious objections.

It is unclear how many employers take this step. A June survey by the Society of Human Resource Management showed that 29% of workers say their employers need vaccines. A Gartner poll in late July found that only 9% did so.

Even among hospitals, most employers do not have a vaccine warrant. The American Hospital Association said only 2,100 hospitals, about a third of the country’s total, require vaccines, and many are in places where state laws or executive orders require them.

“Employers in an environment of labor shortage don’t want to create any barriers to employment, let alone any cause for people to move elsewhere,” said Julia Pollak, chief economist at the site ZipRecruiter job.

Until next time

Friday: Data on US personal expenses and income