Is the Stock Market’s Performance Delaying the Stimulus Bill?

August 20, 2020

Talks about another round of stimulus spending have stalled out in Washington, and American families, workers, and investors are all wondering what it will take for Congress to finally act. One possible answer, according to BlackRock’s Chief Investment Strategist, is turmoil in the stock market.

In an interview with Bloomberg, Mike Pyle posits that there’s a “chicken and egg problem” regarding a stimulus deal. Because the stock market is still performing well, Congress feels little pressure to act quickly. The problem, however, is that the market may have already priced in a second round of stimulus spending. The risk now is that failure to act could spark the volatility that is currently preventing them from acting.

Pyle notes that he expects a package with up to $2 trillion in aid is likely to be passed by the end of September, but a “material risk” remains that no deal will be reached at all.

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