Stimulus Bill Before Election Day? Unlikely, Wall Street Says

Wall Street analysts warn that the death of Supreme Court Justice Ruth Bader Ginsburg—and the ensuing battle over her successor—will engulf Washington and further decrease the likelihood of another fiscal stimulus bill to help the economy recover from the coronavirus recession.

 

With President Trump pledging to announce his Supreme Court nominee by Saturday, the upcoming debate will “formally eliminate whatever chance may have still existed for pre-election fiscal stimulus,” says Adam Crisafulli, founder of Vital Knowledge.

 

Stefanie Miller, managing director of FiscalNote Markets, agrees that the battle over the Supreme Court vacancy will be the “death knell for COVID-19 relief prior to the elections,” as Republicans seek to jam through a nominee and Democrats take “dramatic actions” to impede the process.

 

Economists at Wells Fargo Securities put the chances of another stimulus bill before the election at just 25%, saying that the prospects for an agreement look unlikely given that “both sides seem dug in and willing to wait.”

 

Given the upcoming Supreme Court nomination fight, “this means that the fiscal stimulus is really all but dead,” wrote Sarah Bianchi, macro research analyst at Evercore ISI.

 

“Congress simply will not have the oxygen or the bandwidth to sort out those difficult issues” before November, she added.

 

“The Supreme Court fight is likely to take all the oxygen on Capitol Hill through November,” agrees Chris Krueger, strategist at Cowen, though he adds that more stimulus could still arrive during the lame duck session after the election.

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