Insight - Markets second-guess policy rollback

Economic outlook: Deutsche Bank logo is seen in Hong Kong. While forecasters such as Deutsche Bank and Goldman Sachs have scaled back the extent of their expected 2020 economic contractions, their interest rate horizon barely changes at all. — Reuters

THE once resolute “whatever it takes” message of government support for pandemic-hit economies is fraying at the margins as some recovery from the Covid-19 shock emerges, leaving buoyant markets pondering the prospect of ebbing stimulus.

Government ministers are starting to stress that borrowing can’t keep rising at this year’s pace for much longer, even though winding down fiscal action at a time when the rebound is incomplete, and the virus still spreading, could be jarring.