With lenders unusually cautious, household and business spending may react less than would normally be expected to low real interest rates because tight nonprice credit terms are restricting access to borrowed funds.
Also, the above-normal levels of uncertainty faced by households and firms could damp the responsiveness of consumption and investment spending to the boost in household income and business earnings generated by the fiscal stimulus. Finally, any increase in uncertainty about the longer-term trajectory of government borrowing could raise term premiums.