Many Don’t See A Stimulus Passing In 2020

Update On Stimulus

The latest headlines on the stimulus sound good, but many are actually quite skeptical. On Thursday, McConnell stated he has seen “hopeful signs” for a deal, but he released a $500 billion proposal. He hasn’t moved his stance in the past few months. Pelosi and Schumer backed the $908 billion bipartisan proposal. McConnell stated on the Senate floor. “Compromise is within reach. We know where we agree. We can do this.”

They definitely know where the other side is since this has been going on for months. The problem is neither side is willing to move enough. McConnell wants liability protections for businesses and universities which the Dems don’t want. The Dems want help for state and local governments which McConnell doesn’t want. They are also negotiating on an omnibus spending deal. It's unlikely that there will be a stimulus passed before the Senate special elections. There might be a spending bill passed.

The Georgia Senate elections complicate things. The election is on January 5th. In an average of 3 polls, the Republican Perdue is up by 0.7%. In an average of 4 polls, the Dem Warnock is up by 2.4%. Some think that Perdue and Warnock will win. Usually, the GOP does well in non-presidential elections. However, Loeffler is dealing with the controversy over her selling stocks after getting briefed on COVID-19 earlier this year.

Moody’s has come up with 3 scenarios of how fiscal policy impacts the unemployment rate. As you can see from the chart above, the unemployment rate will be flat in 2021 if there is a $1.5 trillion stimulus. It will rise modestly with a $650 billion stimulus and get to almost 10% with no stimulus. However, Moody’s has been too negative for the past few months. Unemployment rate will fall below 6% by the end of next year regardless of whether a stimulus is passed. 

Vaccine Headlines

There were 2 news headlines on the vaccines. A study of the Moderna vaccine stated participants had high antibodies after 119 days. The firm still expects to have 20 million doses in America by the end of the year and between 100 and 125 million doses available globally by Q1 2021. 

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