Question

Will the U.S. economy experience a serious recession following recovery from COVID-19? If so, and you had $100,000 in the bank, would you invest in real estate or other financial assets? If not, then explain what role the government might play to prevent a serious recession. Please explain in a paragraph or two thank yo!

Answer 1

Yes, according to me, the US market is headed towards an impending recession because the shutdown of the companies and the economy during the crisis has shut the future prospect of many of the companies and the demand has slowed tremendously and recoveries are not projected to be Swift because there would be change in the lifestyle after the pandemic is over because people will be more sceptical towards their health measures than money making things.

I would not be looking for investing into to equities, I would rather look for investing into debt, where there is extreme bearishness and that is reflected through lower yields provided on the the 10 year as well as longer-term treasury bonds.If I have to play for the recovery in the US economy I would play through the recovery in the bond yields.

Government can play a serious role in preventing a recession but they should be proactive in their measures. They should not be doing what Federal Reserve is currently doing by providing ample liquidity and interest rate support through quantitative easing and buying of securities directly into the market, it would privatize the profits and socialize the losses and hurt the United State economy in the long run so I think it is better to be proactive and take harsh measures without pleasing the government and regulate the overall economy in such efficient way that it is controlled through proactive measures. So, better management of the monetary policy can help in preventing a recession.