US stock futures are pointing to a positive open today, driven primarily by growing optimism that the ongoing government shutdown—now the longest in history—could end soon, potentially alleviating economic uncertainty and news of the US government proposal to give $2000 tariff revenue dividends per person. This is like stimulating the economy, similar to what happen during the pandemic when the government gave money to each individuals. Helicopter money is a key driver of inflation so today we see higher bond yields, higher gold and higher crypto. Stocks are also rallying as they did in 2020.
Stocks are rallying because this stimulus is seen as the beginning of a larger stimulus package that will be necessary to help people who are not earning as much as before the AI adoption. Experts have been saying that AI will displace jobs, people will work less hours, they will need support from the government. The economy will become stronger as prices drop and consumption increases due to AI but the number of people in full employment will decrease. Retail prices will go down but asset prices will go up, this is deflationary. That is why the government is not worried about inflation, inflation should not go up despite stimulating the economy.