Rolling coverage of the latest economic and financial news
- Trump: No stimulus package until after election
- Oil falls after Wall Street selloff
- President pushing for $1,200 cheques instead
- Pelosi blasts ‘complete disarray’ at White House
Deutsche Bank told clients this morning that Trump’s decision to halt stimulus package talks is a shock.
Particularly as America’s top central banker has been pushing for more fiscal support, fearing that the recovery could falter.
President Trump once again took control of the headlines yesterday when he tweeted late in the US session that he had instructed White House negotiators to stop further US stimulus discussions with Congressional Democrats until after the election. He argued that Speaker Pelosi was not arguing in “good faith” and that he wants Congress to focus on the Supreme Court nomination of Judge Barrett instead. This came as a surprise after relatively positive headlines from Pelosi and Treasury Secretary Mnuchin earlier in the week, and also represented a reversal in tone given comments late Monday from White House Chief of Staff Meadows, who said “There are a lot of people that continue to hurt, are waiting on stimulus, and the President’s committed to getting a deal done…He wants to make sure we move expeditiously, but also in a fiscally responsible manner.”
The tweet also came just a few hours after Fed Chair Powell’s speech at the NABE’s annual meeting. While not much new information was proffered, Powell made one of his plainest cases for fiscal stimulus yet, saying “the risks of policy intervention are still asymmetric”, and that “the risks of overdoing it seems, for now, to be smaller” compared with the risks of offering too little support. If the current polling at both the national and state level holds, and former Vice President Biden were to win the election in November, fiscal stimulus may indeed come but will have to wait until Q1 of next year when a new government is seated.
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“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,”
The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!
If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy? @MarkMeadows @senatemajldr @kevinomccarthy @SpeakerPelosi @SenSchumer
Dow closes almost 400 points lower after Trump calls off stimulus, causing sudden drop in stocks. https://t.co/G7w8ENqW7o pic.twitter.com/uIetPZSIHf
“The White House is in complete disarray.”
Related: Democrats outraged as Trump halts Covid stimulus talks until after election
Clearly, the President is looking to turn the tables and take back control of the election narrative and put the ball back in the Democrats’ court with his standalone $1,200 stimulus check suggestion via Twitter.
Major fiscal stimulus is off the table until after the election. The most that markets can expect before then is income support for individuals that would be positive for risk sentiment at the margin. Income support should not however be conflated with expectations for the post-election stimulus that relies on a Democratic sweep of Congress.
European Opening Calls:#FTSE 5944 -0.10%#DAX 12891 -0.12%#CAC 4884 -0.24%#AEX 554 -0.27%#MIB 19339 -0.47%#IBEX 6908 -0.41%#OMX 1837 -0.12%#STOXX 3226 -0.21%#IGOpeningCall