–Election Day Pressure Builds on Senate to Get Pandemic Relief Passed
–Tsy’s Mnuchin in Abu Dhabi But Has Call Skedded with Speaker Pelosi
WASHINGTON (MaceNews) – Federal Reserve Vice Chair Richard Clarida Monday emphasized that the central bank will be watching the economy through a wide variety of indicators and won’t be considering any change in rates until it sees a recovery in jobs and inflation.
Addressing the American Bankers Association annual convention virtually, Clarida said, “So we’re going to be looking at a broad range of labor market indicators” until there is “confidence that the economy has returned to, you know, what we would consider a level of consistent maximum employment, similarly on inflation.”
The economy is “not going to get back” until the pandemic “is behind us,” he said. The “exogenous shock” was met by central bank and fiscal responses that were “absolutely essential to cushioning the blow.”
Answering questions posed by ABA President Rob Nichols, Clarida did not push for more fiscal stimulus although his implication was that so far it’s been vital. He did say that the “short answer” to whether the Fed has run out of tools is “no.”
The Fed’s “baseline projection” is that there will be a relatively prompt rebound to our longer run goals,” he said.
The status of efforts by the Speaker of the House Nancy Pelosi and Treasury Secretary Stephen Mnuchin, that continued on Monday, to formulate something President Trump would sign has seen the price tag escalate to the Speaker’s target of $2.2 billion with Trump saying he’s now willing to go even higher. Pelosi, though, has emphasized it is not just the money total that is important to her, but the details of what it will pay for, particularly in how it meets what she sees as the health and economic needs of children and minorities. She also wants to limit presidential discretion on how the money is spent.
Senate Republicans have not been entirely unified in their opposition to a multi-trillion dollar comprehensive deal. GOP Leader Mitch McConnell said both that he doesn’t want to bring a big spending package to the floor yet also would allow the Senate to consider whatever Pelosi and Mnuchin might come up with. Later this week he’ll have the Senate vote on two smaller packages that would need Democratic support to pass and so seem doomed to fail.
In the background is an election that, as it gets closer to being just two weeks away, is increasing pressure almost by the hour on Republicans to come up with something, not just to enhance the president’s chances but to help preserve the Republican Senate majority. It’s what gives McConnell a deciding say in anything Trump would want to accomplish legislatively and, in the future should the majority be sustained, with anything on the agenda of a President Biden as well.
Pelosi has talked of a 48-hour deadline that would be up something Tuesday or Wednesday in the context of the time it would ordinarily take the House to process agreed-upon package, which would be a week in the House and another week in the Senate. However her deadline was not interpreted as a threat to cut off talks and in a pinch, both the House and Senate could act more quickly. House members are subject to a 24-hour call back to duty while the Senate has remained in session.
Mnuchin is in Abu Dhabi but nevertheless has a call with Pelosi scheduled for 3 p.m. ET.
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