Fiscal Stimulus Is Unlikely to Cause Persistently Higher Inflation.
Massive stimulus packages have investors’ fearing an uptick in inflation and its effect on equity markets. In this paper, we explore the historical effects of fiscal stimulus on GDP growth and make the argument that any inflationary pressures are likely to be transitory as the initial pent-up demand fades and companies return to full capacity following recessionary cutbacks during the pandemic.
Founded in 1979, Fisher Investments is an independent, fee-only investment adviser with $197 billion under management.* Fisher Investments maintains four principal business units, Fisher Investments Institutional Group, Fisher Investments Private Client Group, Fisher Investments 401(k) Solutions Group and Fisher Investments Private Client Group International, which serve a global client base of diverse investors. The clients of Fisher Investments and its affiliates include over 100,000 clients. Founder and Executive Chairman Ken Fisher’s “Portfolio Strategy” column for Forbes ran from 1984 through 2016, making him the longest continually running columnist in the magazine’s 90+ year history. He has also authored several New York Times bestsellers on finance and investing. (*As of 3/31/2022)