Yesterday afternoon, President Trump told his representatives to pause negotiations on a new pandemic relief bill until after the election, tweeting, “after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”
Markets did their best Grand Canyon impression. The Dow swung as much as 600 points lower and the S&P took a skinny dip too:
Last week, Trump threw his support behind a $1.6 trillion package and tweeted “GET IT DONE” from the hospital on Saturday.
So what happened? Trump said yesterday that House Speaker Nancy Pelosi wasn’t negotiating “in good faith” and was trying to bail out Democrat-controlled states with “money that is in no way related to Covid-19.”
That’s far from the end of the story, though. Later last night, Trump tweeted that Congress should pass payroll support for airlines and small businesses that he’d “sign now.” He also said he’d support $1,200 stimulus checks sent out to the American people “IMMEDIATELY.” This, of course, contradicted his tweets from a few hours earlier, so it’s safe to say no one really knows the president’s stance on more aid.
But the stakes are incredibly high
Trump’s initial tweets came hours after a Powellful warning from the Federal Reserve. In a virtual speech before the National Association for Business Economics, Chair Jerome Powell said businesses and households are facing a “weak recovery” that will cause “unnecessary hardship” unless the government offers more support.
Powell praised lawmakers for their “innovative” bills earlier this year. But not afraid to wield the carrot and the stick, he warned that initial gains could stall as businesses reopen to weak demand. And if the recovery slows, a “tragic” escalation of existing racial and wealth inequalities could come.
His main point: Lawmakers need to do something. “Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”
Via Morning Brew