US President Donald Trump on Tuesday broke off talks on a new stimulus plan to boost the Covid-ravaged US economy until after the elections, causing Wall Street to overturn and overturn recent advances in lengthy negotiations.
Tuesday afternoon’s tweet dashed the optimism that had developed in recent days after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin broke up talks on a 2.2 trillion follow-up to CARES bill US dollar resumed to moderate the coronavirus downturn.
Federal Reserve Chairman Jerome Powell on Tuesday again called for additional spending to help the United States weather a downturn that caused tens of millions of layoffs and a historic decline in annualized GDP in the second quarter.
But Trump accused the Democratic House leader of bad faith and said he had asked Senate Majority Leader Mitch McConnell to instead focus on reassigning his appointed judge to a Supreme Court opening.
“Nancy Pelosi is asking for $ 2.4 trillion to save ill-run criminal democratic states, money that is in no way related to COVID-19,” Trump tweeted, citing an incorrect number for the Democrats’ latest proposal .
“We made a very generous $ 1.6 trillion offer and, as usual, she’s not negotiating in good faith. I decline her request and look to the future of our country.”
The president’s tweet soaked up the excitement of Wall Street traders, who had hoped for another injection of Congressional money and dropped the Dow 1.3 percent at the close of trading.
Trump’s rival in the November election, Joe Biden, attacked, saying the president has “turned his back on every single worker whose job has not yet returned … He has turned his back on families struggling to get rent and food.” put …. on the table.” and take care of their children. “
Should he win the election where polls show he is lagging behind Biden, Trump added he would work with Congress to pass “an important stimulus bill focused on hardworking Americans and small businesses.”
The president said he had asked McConnell to focus the Republican-controlled chamber on reassigning Amy Coney Barrett to the Supreme Court seat vacated by the death of Ruth Bader Ginsburg last month, which is a conservative one would give a solid majority of six to three.
Earlier in the day, Powell said at a business conference the US recovery from Covid-19 was “stronger and faster” with more government help to protect itself from the possibility of accelerated job losses.
“Too little support would result in a poor recovery and create unnecessary trouble for households and businesses,” said Powell.
“Even if policies ultimately turn out to be bigger than necessary, they won’t be in vain.”
The CARES bill, passed in the wake of the March pandemic, included additional weekly payments of $ 600 to the unemployed as well as a program of loans and grants for small businesses.
Both programs expired in late July, however, and despite weeks of discussions, Pelosi, Mnuchin, and other top officials remained far from each other over how much more they should invest in another bill.
Any measure was expected to partially restore weekly unemployment payments and the small business aid program.
It could also have provided additional funding for severely affected airlines that laid off more than 30,000 people in early October after the CARES bill ran out of budget.
Act with hope
Art Hogan of National Securities told AFP that hopes for additional spending by Congress were key to Wall Street’s recent gains, but “the door that was open has closed”.
Labor ministry data released last week showed that the pace of hiring slowed in September compared to the previous month, adding a disappointing 661,000 new jobs.
Meanwhile, data shows that more than 800,000 people are filing new unemployment benefits every week, still more than six months after the store closings began over the worst single week of the global financial crisis, 2008-2010.
Traders were happy to see Mnuchin and Pelosi resuscitating talks last week, Hogan said, but now they have been disappointed.
“This has gone from tailwind to headwind for this market,” he said.
(Except for the headline, this story was not edited by GossipMantri staff and published from a syndicated feed.)