"On To Plan B": What Goldman Thinks Happens Next In The Stimulus Fight

  • Written by Zero Hedge
  • Published in Economics
"On To Plan B": What Goldman Thinks Happens Next In The Stimulus Fight Tyler Durden Wed, 10/07/2020 - 10:13

As Goldman's chief economist Jan Hatzius writes this morning, perhaps as he looks at the overnight chart of the S&P, stimulus odds are lower following President Trump’s announcement that talks with Speaker Pelosi have ended. He adds that "very limited fiscal measures are possible on a piecemeal basis, like airline aid, but not some of the larger items such as stimulus payments that the President has suggested Congress consider as a standalone policy." His conclusion, as we have said all along is that "more substantial fiscal support is likely post-election and will depend on the election outcome."

Before we present the full details of Hatzius' note looking at "Plan B" in the Fiscal stimulus fight, a quick reminder on what we reported over the weekend were BofA's post-election stimulus scenarios:

  • "Supersized" ($3.5tn): This scenario assumes the Democrats sweep the November elections and pass a bill that closely resembles the $3.4tn Heroes act passed by the House Democrats in May. The bill would include a second round of stimulus checks, $1tn in State and Local aid paid out in two installments and an extension of the $600/week additional unemployment. Even under a Democratic sweep, the likelihood of a bill of this magnitude passing is low given that the economic recovery has been much faster than what was anticipated in May.

  • “Baseline” ($1.5tn): This is our current assumption and assumes that Biden wins the presidential election and Congress control remains split. Similar to the extreme scenario, the bill is expected to include another round of stimulus checks, $500bn in aid for state and local governments and...

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