Policy Uncertainty in Stratosphere

"When you find something you've got confidence in, everything changes. It just doesn't make any sense."
--Jesse Bishop (Twelve O'clock High)

Doesn't appear to be Baker et al's economic policy uncertainty series that we've discussed before, but the picture is probably accurate.

Economic uncertainty continues to skyrocket & is now more than double prior peak @business pic.twitter.com/H7JcLiAoYc

— Liz Ann Sonders (@LizAnnSonders) March 30, 2020

Perceptions of policy uncertainty have likely never been higher. Until people can more confidently forecast the consequences (e.g., depth, duration) of the COVID-19 pandemic, they will be wondering what government policy interventions may still be forthcoming.

We might call this 'direct' policy uncertainty. For instance, people are wondering how much more stimulus the federal government might inject into the system.

People will also be wondering about 'indirect' policy uncertainty--i.e., how government policies, once implemented, will affect other factors. For example, people are trying to wrap their heads around how the massive amount of intervention already done will effect stock markets, general prices, trade, etc.

Absent better understanding here, perceived policy uncertainty levels will remain stratospheric.