2020 Pandemic Recession
The shortest but deepest-ever US recession: a 2-month cycle triggered by government-mandated COVID lockdowns. GDP fell 10% in a single quarter, unemployment hit 14.8%, and the Fed expanded its balance sheet by $3 trillion inside 90 days.
What caused it
- •COVID-19 lockdowns halting services and travel in Q2 2020
- •Global supply-chain shutdowns compounding the demand collapse
- •Corporate credit market seizure in March 2020 before Fed facilities intervened
The indicator playbook
The 2020 recession is the canonical exogenous-shock recession — no traditional indicator led it, because the trigger was not financial. The Fed's response (QE, credit facilities, zero rates) combined with $5T of fiscal stimulus produced the fastest-ever recovery.
What ended it
Massive fiscal stimulus (CARES Act, Paycheck Protection Program), Fed zero-rate policy plus open-ended QE and novel credit facilities, and rapid vaccine development. Output recovered to pre-pandemic peak by mid-2021.
Modern parallels
The pandemic policy response seeded the 2021–23 inflation problem. The scale of combined monetary and fiscal expansion was the single largest macro experiment since WWII.