A Stimulus Plan is Agreed Upon

Stock market investors are celebrating last night’s $2 trillion Coronavirus Stimulus Plan, which lawmakers hashed out and finally agreed to this morning.  Although checks will be sent to individuals, it is expected to take until May for the to arrive.  Under the plan, single Americans making less than $75,000 will receive $1,200 and married couples making less than $150,000 will receive $2,400.  It is expected that 90% of Americans will receive a check, which will certainly make an impact on the budgets of many.  However, depending upon how long this crisis lasts, this isn’t enough to truly help financially save the millions of Americans who are expected to be out of work for an extended period of time.  So it is reasonable to assume that this will deeply impact peoples’ ability to make their house payments, which will in turn have an adverse impact on the mortgage and housing industries.

Tomorrow we will receive an update on the number of Americans who have filed for unemployment benefits in the last week.  Given that the number of claims are crashing the computers of unemployment offices, we can expect to see an insanely high number of claims reported.  In addition to people losing their jobs, there are thousands of employees who are taking forced pay cuts designed to help save businesses from having to lay off.  Personally, I like the notion of a company having all of their employees hurt a little vs. a few hurt a lot.  So when we see the number of people who lost their jobs, know that there are thousands more who will also be hurting financially as they try to adjust to a lower level of income.  Unfortunately, most households depend on every dollar they earn, so a pay cut will cause massive social and economic problems for people.  Things will certainly get harder before they get back to normal in this country.

With bond prices at record high levels, I remain in a locking bias.  Now is a great time to secure a rate.