The New York Times reports:

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.

Hours later, President Trump delivered his own message: Forget it.

In a series of conflicting tweets, the president said the economy was “doing very well” and coming back “in record numbers,” suggesting that no additional help was needed while also saying that he would wait until after the election to “pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

While the chances of Congress reaching a deal on another package were already slim, Mr. Trump’s directive sent markets swooning as the reality sank in that the economic recovery, which is slowing, would not get another jolt before Nov. 3. The S&P 500 fell more than 1 percent soon after Mr. Trump’s tweet, after having been higher in the moments before. [Continue reading…]

CNN reports:

President Donald Trump is once again warning voters that Democrats would “shut our economy and jobs down” if they win in November.

Goldman Sachs is telling its clients the exact opposite.

Just hours after Trump’s all-caps Monday morning tweet predicting economic disaster, Goldman economists pointed out that polls “suggest a ‘blue wave’ in which Democrats gain unified control of Washington is becoming more likely” — and they’re not suggesting investors dump stocks.

In fact, “all else equal, such a blue wave would likely prompt us to upgrade our forecasts,” Goldman Sachs chief economist Jan Hatzius wrote in a Monday report.

It’s true that if Democrats sweep into power early next year, it would likely translate to higher taxes and regulation. Such a reversal from the Trump agenda could eat into corporate profits and the earnings for affluent families.
But Joe Biden is also promising a bonanza of government spending that, coupled with extremely low interest rates, would likely speed up the economy.

Goldman Sachs wrote that a blue wave would “sharply raise the probability” of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. The bank also cited Biden’s longer-term spending plans on infrastructure, climate, health care and education. [Continue reading…]