Two weeks ago, I don’t think anybody would have guessed that one of the last major conflicts holding up a deal over coronavirus aid would have somehow centered on a handful of emergency lending programs that have barely been used since the Federal Reserve christened them this year. Yet here weare.
Republicans, led by Sen. Pat Toomey of Pennsylvania, have launched a last-minute bid to permanently shut down some of the credit facilities that the central bank launched this spring in response to the pandemic specifically, ones that allowed it to buy corporate bonds, and lend to state and local governments as well as midsized companies. Democrats including President-elect Joe Biden’s team have cried foul, accusing the GOP of attempting to sabotage the incoming administration with a rash demand that would permanently change the Fed’s crisis-response powers.
Markets Gear Up For Flood Of Stimulus
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On Tuesday, the pendulum of fear shifted strongly to worries of missing out again from the notion the market is at a near-term top.
It was all about the fiscal stimulus, which could happen this week and again in January or February. There are a lot of potential deal combinations swirling around. However, I find it interesting that Sen. McConnell would be cool with a deal that does not include liability coverage for small businesses.
Moreover, I find it odd Democrats would go along with a deal that does not include individual payments to households.