President Donald Trump, who yesterday announced he had instructed Republicans not to negotiate a coronavirus financial stimulus package until after November’s general election, appeared to reverse course this morning, telling House Speaker Nancy Pelosi (D-Calif.) that he is “Waiting To Sign” a bill authorizing stimulus checks as soon as it lands on his desk.
The President’s remark came as he quoted his own tweet from yesterday in which he said that he’ll sign a bill for $1200 stimulus checks that would “go out to our great people IMMEDIATELY.”
— Donald J. Trump (@realDonaldTrump) October 7, 2020
Trump’s mixed messages confused financial markets and came after Federal Reserve Chairman Jerome Powell said more financial relief would be needed to help the economy recover.
“This appears to be a none too subtle effort to cherry-pick the bits of a fiscal stimulus plan that are directly vote-winning potentially,” said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda. “Whether the American public buys it or not is another thing altogether.”
Stock-index futures, having dropped sharply yesterday, rose today as soon as it became clear Trump had changed his mind. But whether a new stimulus deal will be reached is uncertain.
“Although markets responded positively to his comments, the chance of any actual fiscal stimulus appears to be nil at this point as both time and political will are absent.,” said Boris Schlossberg, managing director at BK Asset Management, in a note. “The market’s reaction may have been naive but the underlying bid in stocks suggests that longer-term investors are convinced that the U.S. economy will get a large stimulus package irrespective of who the president will be in 2021 and that conviction remains highly supportive of stocks.”