Trump Rattles Markets by Calling COVID Relief Bill an Unsuitable ‘Disgrace’

U.S. stock futures are trading slightly lower early Wednesday, but well off their lows as investors assess the latest developments in Washington over coronavirus relief. Late Tuesday, President Trump expressed concerns about the new COVID-19 relief package which could delay the deployment of funds to struggling Americans.

Trump called the new $900 billion COVID relief bill an unsuitable “disgrace” and admonished lawmakers to alter the bill’s contents, especially the amount allocated for direct payments to Americans. Trump did not threaten to veto legislation but he asked to be sent a “suitable bill or else the next administration will have to deliver a COVID relief package.”

Trump Demanding Lawmakers Raise the Second Round of Stimulus Checks

President Donald Trump is demanding lawmakers raise the second round of stimulus checks to $2,000 per person, from $600.

“I am asking Congress to amend this bill and increase the ridiculously low $600 to $2000, or $4,000 for a couple,” Trump said in a video posted to Twitter Tuesday night.

Trump is Powerless to Raise Direct Payments

If you are one of the people eligible for a stimulus check, don’t get your hopes up. The legislation passed both houses of Congress with veto-proof majorities, meaning that Trump is powerless to raise direct payments from $600.

Democrats May Fight for Additional Funds

A senior Democratic aide told CNBC that House Democrats will attempt to pass a standalone bill for $2000 direct payments on Thursday, though it is unclear whether this would pass a Republican-led Senate, or even receive the unanimous consent necessary in the House.

Lawmakers calling for a vote on this standalone measure have not specified whether this would be in addition to the $600 second stimulus check, or would instead replace it.

On Monday, House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., called the plan a “package that delivers urgently needed funds to save lives and livelihoods of the American people as the virus accelerates.” They called the plan inadequate and noted they would push for more relief spending after President-elect Joe Biden takes office on January 20.

Late Tuesday in another jarring twist, Pelosi, one of Trump’s political arch enemies, agreed with his call for $2,000 payments. “Democrats are ready to bring this to the Floor this week by unanimous consent. Let’s do it!” she tweeted.

Biden Promises More Fiscal Stimulus

Although investors seem to be shrugging off the news, the idea of additional stimulus after President-elect Joe Biden takes office on January 20, should not be discounted and is likely to be a market moving event.

In a statement on Tuesday, Biden said the $900 billion plan “provides critical temporary support” but “is just the beginning.”

“Immediately, starting in the new year, Congress will need to get to work on support for our COVID-19 plan, for support to struggling families, and investments in jobs and economic recovery,” he said. “There will be no time to waste.”

Market Response

U.S. equity futures initially fell on Trump’s comments, probably because they interpreted them to mean he was going to veto the current stimulus bill. But after realizing that Trump is essentially powerless to do anything at this time because a veto would likely be overrode, prices settled down and the indexes began to recapture some of their earlier losses.

The U.S. Dollar and Gold, two assets that would be directly impacted by additional stimulus showed little reaction to the new developments.

For a look at all of today’s economic events, check out our economic calendar.