Joe Biden unveils $1.9 trillion Coronavirus relief proposal
- President-elect Joe Biden has unveiled a $1.9tn Coronavirus relief proposal, aimed at urgently combating the economic crisis which the pandemic has triggered. As the US faces its deadliest stage in its fight against the virus, Biden described the moment as “a crisis of deep human suffering”. If adopted, the proposal would tack on $1,400 to the $600 in direct payments for individuals that Congress approved recently.
- Legislators gathered in the same chamber that Trump supporters stormed to impeach the President on Thursday. It marked the first time in the 231-year history of the United States that a President has been impeached twice in his term. For a man who likes to boast about the historic successes of his presidency, it is an ignominious ending to his time in office.
- This week Sir Patrick Vallance, the Government’s Chief Scientific Adviser, warned that the UK was now in a “period of high death numbers” which will not “reduce quickly” as Department of Health figures show the daily Coronavirus death toll has risen 50% week-on-week since December. This week, analysis suggests that the overall number of deaths has passed 100,000.
This week, investors had their first look of President-elect Joe Biden’s proposed stimulus bill. Though it is likely that a bill will pass in the coming weeks, optimism appears to be turning to concern as investors fear that it might get watered down in Congress. The US economy is currently reliant on fiscal and monetary stimulus; this bill is ultimately good news in the short-term as it provides much needed support to businesses which are still feeling the brunt of lockdowns and reduced economic activity.
Concurrently, Federal Reserve Chairman Jerome Powell indicated in comments this week that interest rate rises are not on the agenda. This is fairly unsurprising as any such tightening of monetary policy would almost certainly trigger a recession. Once the stimulus bill is passed, the next item on the Fed’s agenda will be printing the money to finance the stimulus bill.
Once again, this week has provided further evidence that the twin pillars of government and central bank support are here to stay, providing an extremely accommodative short-term environment for markets. We are confident that our portfolios are positioned to benefit from this conducive environment but that our holdings also have the balance sheet strength to protect against any market corrections.
Quote of the Week
A Kidderminster man has tattooed a huge image of the Prime Minister’s face on his stomach to raise money for a women’s cancer treatment. In our polarised times, tattooing your favourite politician’s face on your stomach hardly raises an eyebrow anymore. In fact, it’s almost hardly newsworthy when our news cycle has been dominated by men dressed as a bison storming the US Capitol… but we digress. This Kidderminster man’s antics does beg the question, if you had to get a tattoo of a politician, where would it be and who would it be? Perhaps Nicola Sturgeon’s face superimposed on the body of a fish with the caption “pollocks to independence” beneath it; topical and witty.