With Tweet, Trump Kills Talks Of New Stimulus, Deeper Recession Likely
Trump has cut off stimulus negotiations by tweet. Market initially reacted with steep sell-off (look at the graph). (It has rebounded a bit since the announcement)
Here, Trump is doing opposite of what Fed Chairman Powell advised:
"Jerome H. Powell, the Federal Reserve chair, argued that it was better to overdo the pandemic policy response to avert “tragic” fallout than to undershoot."
Powell advised that Americans need massive stimulus or U.S. could face deeper recession, possibly a depression."
Powell advised that the U.S. needs another massive stimulus or it could face a deeper recession, or possibly worse.
On Twitter, Trump called on the U.S. Senate to focus on his SCOTUS nominee instead.
Jerome H. Powell, the Federal Reserve chair, delivered a blunt message to Congress and the White House on Tuesday: Faced with a once-in-a-century pandemic that has inflicted economic pain on millions of households, go big.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Mr. Powell said in remarks before the National Association for Business Economics.
“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth,” he said. “By contrast, the risks of overdoing it seem, for now, to be smaller.”