President Trump pulled the plug on ongoing bipartisan coronavirus relief talks in an abrupt move that jolted Wall Street and surprised lawmakers of both parties, but hours later called on Congress to approve a bill providing another direct check to many Americans, the Wall Street Journal reported. “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill,” Trump wrote earlier yesterday on Twitter. Trump’s tweets appeared to end the long-running effort between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin to negotiate an agreement on another trillion-dollar-plus coronavirus relief deal. But later yesterday, Trump appeared to backtrack, calling on Congress to approve some additional assistance for airlines and a small-business aid program. He also tweeted that Congress should pass a bill providing another direct check to many Americans. “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,” Trump tweeted. Trump also called on Congress to quickly extend $25 billion in new payroll assistance to U.S. passenger airlines furloughing thousands of workers as air travel remains down sharply amid the coronavirus pandemic, according to Reuters. Democrats have largely resisted passing piecemeal bills, pushing instead for an overall agreement. Stocks turned lower yesterday on Trump’s tweets regarding the talks. Read more. (Subscription required.)
In related news, Federal Reserve Chairman Jerome Powell yesterday reiterated his belief that the U.S. economy needs more fiscal support even though the recovery from the “natural disaster” of the coronavirus pandemic so far has been strong, MarketWatch.com reported. Powell argued in a speech that it was better for Congress to provide too much fiscal support than the reverse. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said. This would lead more businesses to declare bankruptcy and for households to run into severe economic distress. On the other hand, even if policy actions are more than is needed "it will not go to waste,” Powell said. “The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” the Fed chairman said. Read more.
