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The US Treasury Secretary Janet Yellen said that the banks are in a healthy condition and could pay dividends and repurchase stocks. The Biden administration is further mulling a $3 trillion stimulus for economic recovery.
On Wednesday, March 24, the US stock market remained upbeat during the trading hours. Fed Chair Jerome Powell and Treasury Secretary Janet Yellen shared and optimistic for the US economic recovery from the Coronavirus pandemic. Thus, the economy-linked industrial and financial stocks surged north.
The Wall Street indexes have been on a topsy-turvy ride over the last few weeks juggling between the concern of the rising bond yield as well as the optimism with fresh stimulus. On Wednesday, Treasury Secretary Janet Yellen the US banks are in healthy condition to pay dividends as well as repurchase stocks.
The easing bond yields have also helped financial and energy stock to benefit from the reopening of the economy. Besides, the US factory activity has also picked up in early March with the surge in new orders. But the rising COVID-19 cases cast a shadow on the supply chain activity resulting in some disruptions. As a result, manufacturers have been increasing prices further raising concerns of inflation.
On Wednesday, the financial and industrial sectors added 1.5% each, while the energy sector surged 3%. The Brent crude price has also rebound after a fall on the previous day. Speaking to Reuters, David Yepez, lead equity analyst and portfolio manager at Exencial Wealth Advisors said:
“In order for the market to bottom we need to have more fear, and I don’t feel like the market has fear right now. Everybody’s bullish about the prospects of a recovery right now”.
Biden Administration’s $3 Trillion Economic Recovery Stimulus
After passing its $1.9 trillion stimulus a few weeks back, the newly appointed administration under US President Joe Biden is mulling for another $3 trillion stimulus to boost economic activity. The White House is likely to consider different options to pass the proposal. This could possibly include splitting it into two bills.
In a statement to NBC News on Monday, White House press secretary Jen Psaki said that the President hasn’t yet decided how to proceed. She said:
“President Biden and his team are considering a range of potential options for how to invest in working families and reform our tax code so it rewards work, not wealth. Those conversations are ongoing, so any speculation about future economic proposals is premature and not a reflection of the White House’s thinking”.
However, the economic advisors to the President will soon introduce a plan ahead this week. As said, the proposed implementation will likely happen in two different phases. The first is putting money to boost transportation systems, manufacturing, reducing carbon emissions, and others. The second is alleviating economic inequities by investments in universal pre-K, paid leaves, and community college.