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Morgan Stanley is out with a great piece of research detailing the timeline of the stimulus package.

the US recession likely will be deeper and recovery slightly later than we thought last month. The reason: Fiscal stimulus and financial rescue plans likely will be less timely and targeted than we expected a month ago, implying a weaker near-term outlook. Consequently, we now expect a 2.7% contraction in GDP in 2009, compared with a 2.4% decline last month. We still expect that policy stimulus will begin to lift output by late this year, but now project five consecutive quarters of contracting output, a peak to trough decline in real GDP of 3.6%, and a recession that lasts 22 months − all post-WWII records.

Lower oil prices should provide a modest offset, boosting consumers’ discretionary spending power. Our commodities team expects WTI crude to average $35/bbl over 2009 − lower than today’s $40/bbl − while recovery will lift quotes back to $55/bbl in 2010 (see Global Oil Outlook – 2009: The Global Engine, Stalled and Flooded, February 2, 2009). Lower oil prices are only one factor behind the plunge in inflation. The deepening downturn has intensified the risk of deflation, as rising economic slack increases the prospective US output gap to more than 7%. Slack overseas will put downward pressure on import prices, and the dollar has strengthened. We think aggressive monetary policy, a global rebound, and increased commodity prices will prevent US inflation from slipping below zero − but the risks, especially over the next year, are tilted toward lower inflation.

Definitely worth a read…