April 2021 Outlook and Insights
Looking ahead
- SBA’s Paycheck Protection Loan Program (PPP) may run out of funds by the end of next week
- COVID-19 progress: 32.5% of the US population fully vaccinated, and 50.4% have 1st dose. Potential 50% of the population will be fully vaccinated by June.
- Fed’s continued purchasing of $120 billion of securities monthly will increase the size of Fed’s balance sheet to $8.8 trillion by year-end 2021. For comparison, Fed’s balance sheet was $3 trillion at year-end 2019.
- One out of 3 employees would look for a new job if required to return to the office full-time, according to a recent survey by Robert Half.
- Low rates and Fed stimulus are likely to continue until the number employed recovers to the pre-recession level of February 2020
- Rising lumber prices have caused home mortgage construction applications to slow down in April.
Looking back
- Economic stimulus actions to counter COVID-19 impact increased the US money supply an unprecedented 30% over the past year.
- US Treasury 10-year rate increased significantly from 0.93% at year-end 2020, peaking at 1.74% earlier in April with concerns about inflation the highest they have been in 50 years. Despite recent volatility, investors should keep calm and carry on; rates should gradually decline in the months ahead.
- Cheap borrowing costs are powering the housing market. The average 11% increase in home values over the past year is the biggest jump since February 2006.
- Wall Street Journal articles in Mid-March on the failure of online fintech lender Greensill Capital provide a reminder of the risks of chasing higher yields and the latest greatest thing.
Resources, recommendations, and reminders
- Deadline to file individual Federal and State tax returns extended to May 17, 2021
- Save money and refinance your home mortgage if your rate is 4% or higher. Email Westfield Bank’s mortgage team at [email protected] to get a free quote.