Stock indexes fell Tuesday, as investors were shocked by the decision of President Donald trump to stop the negotiations on the adoption of the long-awaited stimulus package for the economy until after the presidential elections in the country.
The growth of the stock market on Monday turned into a sharp decrease of the index on Tuesday, followed by the inconsistent and “illogical” step of U.S. President Donald trump to stop the negotiations on the adoption by Congress of the bill “Cares 2”, which should include a number of further economic stimulus to help combat the effects of the pandemic.
Trump said of the decision in a series of messages on Twitter.
Market experts and investors reacted negatively and the major US stock indexes fell: the S&P 500 1.4%, the Dow Jones 1.34% and the Nasdaq Composite index by 1.57%.
Within a few months the Democrats, led by speaker of the house Nancy Pelosi, and the tramp tried to agree on which provisions to include the fifth package help the economy and the budget he will provide. Last week, Democrats passed a bill to aid in the amount of $2.2 trillion. while Republicans have proposed a package of $1.6 trillion.
In his message, trump wrote: “Nancy Pelosi asking for $2.4 trillion. payments, to Democratic States, the money that is in no way affiliated with COVID-19. We have made a very generous offer of $1.6 trillion. and as usual, she does not negotiate in good faith.
I reject them …… request and look to the future of our country. I’ve instructed my representatives to stop negotiations until after the election, and immediately after my victory we will make important law on incentives focused on hardworking Americans and small businesses.”
On the inconsistency of the decision by trump to stop the negotiations on the new bill, says that only three days ago (Saturday) trump has called on officials to take it.
“Do it,” wrote the President on Twitter.
A few hours before the tweets trump the fed Chairman Jerome Powell again urged Congress to approve additional fiscal stimulus, pointing to risks to the economy, if this is not done.
Powell said that “the risks of peripetia seem less” and “even if the political measures will eventually be longer than necessary, they will not be in vain. The recovery will be stronger and will go faster if monetary and fiscal policy will continue to work side by side to support the economy while it is clearly not out of the crisis”.
According to the national polls in the US 66% of respondents said that the country needs more help, and 34% said that it does not need additional help. In six States, where ratings trump and Biden are very close in Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin – 63% of likely voters said that America needs more financial support from the Federal government, and 37% said no.
Economists and political opponents of the trump called the step of the President selfish, saying that this decision will hurt the President’s approval rating ahead of elections.
Jared Bernstein, a former economic adviser to Biden and an informal adviser to his presidential campaign, criticized trump: “At a time when literally millions of people face hunger and evictions, and also with the reduction in the number of jobs, the President is not the time to stop the negotiations. His lack of leadership during the whole process has been and continues to be a huge stumbling block.”