Ten days ago, stocks soared on talk of a $1 trillion-dollar fiscal stimulus bill being "mulled" by the Trump administration.
Mitch McConnell told White House officials behind closed doors that "another round of fiscal stimulus from Congress could be just under $1 trillion", a figure that administration officials are reportedly comfortable with.
Tonight, stocks are soaring once again after Bloomberg reports that a $1 trillion infrastructure stimulus bill is being "mulled" by the Trump administration (why infrastructure this time instead of just a fiscal one? Because it still has to go through the Dem-controlled House, but if it is spun as infrastructure, it has far greater chance of passage).
“Since he took office, President Trump has been serious about a bipartisan infrastructure package that rebuilds our crumbling roads and bridges, invests in future industries, and promotes permitting efficiency,” White House spokesman Judd Deere said in a statement.
Sound familiar? It should. But hey, as long is wards off fears of a second global wave of COVID-19, who cares right?
Indeed, it's like deja vu all over again!
Dow futures are up over 500 points tonight...
Additionally, the dollar is extending its fall...
And Treasury yields are rising as this means yet more supply...
But gold's spike has been erased...
Bloomberg reports that, according to people familiar with the plan, a preliminary version of the proposal being prepared by the Department of Transportation would reserve most of the money for traditional infrastructure work, like roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband.
The regurgitated headlines come after San Francisco Fed president Mary Daly said in a speech this afternoon:
“We need to focus on investments that leverage the talent of everyone and contribute to the economy’s long-term growth prospects.”
She cited health, education and digital infrastructure, such as internet access.
“Now is an especially good time to take on this type of debt,” Daly said.
“Even before the crisis, we were in an environment of low interest rates – and that is expected to continue for the foreseeable future. This makes public spending relatively cheap and easy to finance.”
And what is stopping them? (Apart from getting it through Congress without a massive layer of pork and defunding all of the nation's police forces) Since with The Fed monetizing all the Treasury issuance, MMT is well and truly here.