Not everything worth doing is worth overdoing. Coordinated fiscal and monetary stimulus was a godsend to address the income destruction associated with COVID-19. With recovery accelerating, and
investors enjoying paper wealth and spending power, fabulous policy success is a risk that stokes inflation fears. If coordinated stimulus is overdone, the fault line of anchored inflation expectations will be shaken, and the willingness and capacity of the Fed and Treasury to act will be put to the test.