Market history · Policy ·
The $2.2 trillion CARES Act is signed
On 27 March 2020 President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus package of about $2.2 trillion, according to the Library of Congress and law-firm summaries. It included direct payments to households, expanded unemployment benefits, loans to small businesses and support for large employers.
Together with the Federal Reserve's emergency measures it helped markets recover from the March 2020 fall. The stimulus was followed by further rounds of support, and it raised debate about inflation and deficits that continued through 2022.
For investors the lesson was that policy responses, fiscal as well as monetary, can change the direction of a market within days.
The takeaway
Governments and central banks can reverse a market's direction. Their willingness to do so is part of every crisis.
Sources
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.