The U.S. House of Representatives is expected to overwhelmingly approve the $2 trillion stimulus package Friday that will help many people make ends meet. It’s a welcomed move on Wall Street, and the stock futures are looking positive after rallying ahead Thursday. Despite that, the Federal Reserve System chairman said it’s possible the country is already in a recession.
Our two big takeaways from a conversation with John Silvia, former chief economist of Wells Fargo, Thursday is that this stimulus package is a huge positive for Florida specifically. And he expects us to be out of a possible recession before the end of 2020.
Silvia says the financial crisis is unlike that of 2008. It will be worse for a few months, but he believes it won’t last nearly as long, making it overall less damaging.
“Certainly, in terms of Florida’s situation, certainly not as penetrating because it was a housing situation in Florida that was so negative,” Silvia said. “But it’s probably going to be much deeper than 2008 and 2009 for those two quarters. Nut, then after that, I think it recovers.”
He believes the United States would be out of the predicted recession between September and October of this year.
“We’ll see much lower jobless claims, much more hiring,” Silvia said. “We’ll see better consumer attitudes, and probably more business investments.”
Silvia says the stimulus package would be a win for Florida, for individuals.
“The difficulty is it may not seem like 1,200 is all that much,” Silvia said. “But, when you’re talking about 100 million people, that is a huge bill for the federal government … This is stabilizing people’s income; it’s not replacing all their income.”
“Small business loans available and will be forgiven for companies that keep their employees on hand,” Silvia said. “I think that’s pretty important going forward.”
“The airlines getting money,” Silvia said. “That’s going to help regional southwest for example.”
“We, also again, in this region, we benefit because over $100 billion goes towards hospitals and VA units,” Silvia said. “So this region is very health conscious, health sensitive.”
“We also have money for agriculture, cattle, which is again important for Florida,” Silvia said.
Here’s the catch: Silvia said this is all dependent on the idea that we have a COVID-19 vaccine readily available soon. That’s what instills real confidence in people, and therefore the economy.