Congress this week approved a $2.2 trillion economic stimulus package, which the president signed on Friday. Will it rescue the economy?

The huge spending package will help, but it’s hard to gauge its ultimate effectiveness when the severity of COVID-19’s economic impact remains to be seen, says Schwab Chief Investment Strategist Liz Ann Sonders.

“Fiscal ‘stimulus’ at this stage is really a rescue or triage mission,” Liz Ann says. “It’s unlikely to actually stimulate growth, at least until the country is no longer shut down. Rather, it is meant to cushion the economic blow from the virus-containment policies.”

That said, it was important for the federal government to act quickly and decisively, Liz Ann says.

“Estimates are that the plan will add up to 10 percentage points to real gross domestic product, but that’s likely to be swamped by the expected decline in GDP, at least in Q2,” Liz Ann says.

The 880-page Coronavirus Aid, Relief and Economic Security (CARES) Act includes multiple provisions that will affect Americans and markets. Major features include:

  • direct payments of $1,200 to individuals ($2,400 to couples), plus an additional $500 per child, for individuals earning less than $75,000 ($150,000 for couples);
  • increased and extended unemployment benefits;
  • more than $375 billion in grants and loans for small businesses;
  • up to $500 billion in aid for large businesses, including $25 billion set aside for airlines;
  • $150 billion for states and municipalities;
  • $180 billion for hospitals and other public-health purposes.

Below, Schwab experts provide their perspective on how some of the hundreds of provisions in the 880-page legislation are likely to affect investors or the markets.