- Nearly 10 million Americans are losing or having their unemployment significantly reduced in early September. That accounts for 3 out of every 4 people receiving government enhanced, pandemic-related unemployment benefits. It is the largest benefit cliff in U.S. history. Wealthion Advisors believes this will be deflationary for consumer spending as price inflation continues to rise.
- The loss of these benefits corresponds with the end of moratoriums on rental evictions and foreclosures. When millions of unemployed Americans lose their benefits, the timing means they might soon be in danger of losing stable housing as well.
- The other piece of stimulus shutting down, which could also become a major economic problem according to Wealthion, is that the fiscal policy stimulus is wrapping up as well. When the Fed starts to taper soon, this cliff could “be the trigger that pops the asset price bubble in the financial markets.”
Originally posted on SGTreport