ABSTRACT
The proximate threats to continued economic growth remain the COVID-19 pandemic and policy error at the U.S. Federal Reserve. 2019 and Pre-COVID When teaching an honors finance course in fall 2019, I told my students that an inverted yield curve probabilistically predicted an economic recession in the next 12 to 18 months. First-time claims for unemployment insurance (UI) skyrocketed, and between early March and early June 2020, over 40 million Americans filed first-time claims.2 The unemployment rate quadrupled between March and May 2020. Focusing on direct cash infusions to support consumption, this response amounted to a quarter of annual U.S. GDP.4 The Federal Reserve lowered its overnight lending rate to zero and more than doubled its balance sheet with asset purchases.