Bill Gale

The CARES Act and its Impact on the US Economic Outlook

Sharmin Mossavar-Rahmani, Alec Phillips, Jan Hatzius, William G. Gale, Sharmeen Mosavar-Rahmani, Bill Gale

On March 31, 2020, Goldman Sachs hosted a client call featuring Chief Economist Jan Hatzius and external fiscal experts to analyze the CARES Act and downgrade the 2020 U.S. economic outlook to a record contraction. The discussion detailed the legislation's targeted relief components, including expanded unemployment benefits, direct stimulus checks, and $46 billion in aid for the airline industry, alongside projections that Q2 GDP will fall approximately 10% with net debt-to-GDP rising above 100%. Despite these severe short-term headwinds, experts concluded that low interest rates and the Federal Reserve's potential $4.5 trillion lending capacity would likely prevent a sovereign debt crisis.