On the weekend, investors remain divided between positive news on the front line of potential Covid-19 vaccines and, conversely, the rapid worsening of the U.S. health situation, which is threatening to slow down the economic recovery.
The swift passage of a new budget support package for the economy by Congress appears impossible, although Mitch McConnell, the Republican Senate majority leader, agreed to restart talks on Thursday.
Political instability is also weighing on the overall climate with a tense transition time between Donald Trump and Joe Biden, who will likely to assume office as president on January 20.
Amid the failure of his fraud appeals so far, the move comes as Donald Trump, continues to refuse to accept defeat in the November 3 presidential election. Local authorities in Georgia announced on Thursday that it was Joe Biden who had come out on top in the polls in this swing state after a recount of the ballots.
Donald Trump’s “incredible irresponsibility” was condemned at a press conference on Thursday by the US President-elect, who is continuing discussions on the composition of his cabinet. Referring his future Treasury Secretary, Biden have identified that the names of many Fed officials as well as ex-officials have been under consideration. Those include Raphael Bostic, Lael Brainard, Roger Ferguson and Janet Yellen. Joe Biden said that during Thanksgiving on Thursday, November 26, he will unveil the name of the future finance minister.
In the delicate transition phase between current administration and that which President-elect Joe Biden wishes to bring in place, the outgoing U.S. government is therefore strongly opposing the central bank. In an interview with Bloomberg, the Fed regretted the decision of returning the allocated $455 billion to Treasury and putting of its authority to utilize some services to support the economy to an end on December 31.
Raphael Bostic, President of the Atlanta Fed and potential Treasury Secretary to Joe Biden, said that in the state in which the economy has been going through, it is prudent to maintain these resources. He was referring to Fed’s buying schemes for corporate bonds, as well as direct lending to U.S. corporations and local governments.