Market Update
March 15, 2021

Biden’s Stimulus Bill Passed

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Thoughts Of The Week

Biden’s Stimulus Bill Passed

The successful passage of the US stimulus bill dominated news this week. It was quite a result for the Biden presidency, especially as the full amount was passed and the final tweaks to the bill were very few. Key highlights include $400bn in payments to individuals, $350bn in aid to state and local governments, $226bn for schools and childcare, $163bn unemployment insurance and $109bn for public health.

Not surprisingly, 10-year bond yields began their upward climb. At the time of writing, the US 10-year yield had risen to 1.625%. It wasn’t alone either: the German, UK and Australian 10-year bonds are also up strongly.

The combination of a speedy vaccination programme and new round of payments to households (as soon as next week) sets in place the next phase of bond yield increases. Year-end forecasts for US 10-year yields have been at 2% at the top end. We are not far away from it already. Furthermore, the passage of this Bill is just the first step. Still to follow are an Infrastructure Bill and the Green Bill, both of which could also be significant.


The Week That Was…

In the UK 40% of households reported they had more money set aside vs pre-pandemic. One-third said a holiday, or a treat is what they had in mind to spend it on.

A NY Fed survey (based on 1,300 households) revealed consumers expect gas prices to rise 9.59% over the next year. They also expect rents, food, medical and college costs to rise.


In Australia the Government will subsidise 800,000 domestic flights between 1st April and 31st July as part of a A$1.2BN package. Tourism is worth over A$60BN and employs 5% of the nation’s workforce.


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