CFA Institute surveyed US members on the size of the CARES Act stimulus-induced deficits, the level of disclosure around program distributions, the adequacy of current oversight efforts, and the impacts of record stimulus on capital market functions.
On 27 March 2020, the US government enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, embarking on an unprecedented program of monetary and fiscal stimulus in response to the COVID-19-induced economic shutdown. The level of stimulus has been broad; the program parameters were put together at warp speed; and, even as negotiations over the fourth round of stimulus continue, it is generally expected that further steps and programs may be required as the extent and duration of the pandemic impacts become more predictable
Predictably, the amounts, parameters, and rapid roll out of this unparalleled and open-ended stimulus have raised concerns. The functioning of oversight committees and transparency around the various programs that ultimately will distribute record amounts of taxpayer-funded stimulus need scrutiny. Similarly, long-term concerns surround the resulting budget deficits and the impact on capital markets.
Methodology
The survey was fielded to all active employed CFA Institute members residing in the United States. The survey was sent on 10 July 2020, with two reminders. The survey closed 20 July 2020. Out of the members invited to participate, 8,036 provided usable data, for a total response rate of 11 percent. Margin of error was +/- 1.03%.
Clearly, the market volatility and the historic economic response to the COVID-19 crisis has gained the attention of all stakeholders, not the least of whom are professional investors and advisers. Regarding our professional membership, we increasingly hear the frustration that securities markets and financial analysis have become unnervingly detached from economics. Balancing economic emergency relief with free-market capitalism is clearly a challenge.
Key findings
Clearly, the market volatility and the historic economic response to the COVID-19 crisis has gained the attention of all stakeholders, not the least of whom are professional investors and advisers. Regarding our professional membership, we increasingly hear the frustration that securities markets and financial analysis have become unnervingly detached from economics. Balancing economic emergency relief with free-market capitalism is clearly a challenge.
The majority of members said they approved of the stimulus while also saying that it should not be unlimited.
A large majority are calling for oversight and nearly 90% of respondents expect to see details on the recipient, the amount, and the terms of the distribution. They are particularly interested in full transparency on whether any affiliate of Congress or executive branch received funding.