Cushman&Wakefield. Global Policy Responses to COVID-19

As unprecedented as the crisis is, it’s being met by a wholly unprecedented global policy response. In the U.S., the Federal Reserve responded within the first weeks of March by cutting the target range to effectively 0%, and quickly escalated its financial market support throughout the month. The Fed’s balance sheet has already expanded by over $1 trillion in March alone. On the fiscal policy side, the U.S. Congress and President Trump have already responded with three pieces of legislation totaling more than $2.3T, or 11% of 2019 nominal U.S. GDP. For perspective, after the start of the Great Recession in December 2007, it took the U.S. Congress 10 months to pass the Troubled Asset Relief Program (TARP) and it took the Federal Reserve 11 months to implement quantitative easing (QE). The full fiscal stimulus pumped into the economy throughout 2008, 2009 and 2010 combined totaled about 10% of 2007 GDP.
In other parts of the world, the response has been equally timely and aggressive. In Germany, the combined €1T in direct stimulus and guarantees its government is providing amount to nearly 30% of GDP. In Asia Pacific, substantial “synchronized stimulus” on this scale has never been witnessed. Further, Japan is currently working on its third fiscal package valued at ¥60T—more than 10% of GDP—the largest individual fiscal package pursued, dwarfing the April 2009 stimulus deployed after the Lehman Crisis which totaled ¥56.8T. From Europe and the UK to countries throughout Asia and the Americas, central banks and governments have been called to action—and they are stepping up.

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