Someone tell the stock market: A COVID-19 vaccine will not be a magic bullet for the economy right away, and even with a successful vaccine, recovery will be sloooooooow. Here’s why:
1. Vaccine logistics are still question marks
The Pfizer vaccine that caused so much excitement on Monday with early data indicating its effectiveness needs to be stored at -94 degrees F. Meanwhile, the dozen other vaccines in later-stage testing have similarly specific distribution requirements. Production, logistics, transportation, and rollout could each hamper delivery, and all are still unknowns.
2. We don’t know how effective the vaccines will be
Though Pfizer’s vaccine news is promising, many questions remain, such as how well the vaccine prevents symptoms versus infection, how long immunity lasts, and how well it works in different population groups. The data has not yet been released for review by the scientific community.
3. It may take a year or longer to vaccinate enough people to reach herd immunity
This week, European Central Bank head Christine Lagarde questioned how many people would actually be vaccinated in 2021. High-risk groups will likely be prioritized, leaving millions of lower-risk Americans in semi-lockdown.
4. The economy is structurally damaged in a way that will not simply reverse
“We’re recovering to a different economy,” said Federal Reserve chair Jerome Powell, including large numbers of displaced workers. Powell has repeatedly said that more government stimulus is essential; Congress remains deadlocked on a stimulus bill.
5. People may stop spending again
The country is logging over 150,000 new coronavirus cases in a day. With those kinds of numbers, people may stop spending again as they fear potential infection.