What are the odds of more spending
The market is digesting the $1.9 trillion stimulus package along with the rebound in equities on Friday. That's got the market off-balance and I don't think that can change until bond yields stabilize for a few days.
At the same time, $1.9 trillion is still $1.9 trillion. That's the second-largest stimulus package ever passed in the US and it proves that Democrats are capable of holding together to pass something close to Biden's $3 trillion package later in the year.
At the same time, a new interview is out with Senator Joe Manchin on Axios. He says he won't pass a big infrastructure bill without Republican 'voices'.
"I'm not going to do it through reconciliation," which requires only a simple majority, like the COVID stimulus, Manchin said. "I am not going to get on a bill that cuts them out completely before we start trying."
He also wants to pass the bill in a way that includes a corporate tax hike back to 25% from 21% "at least" and repealing "a lot of" the Trump tax cuts for the wealthy. Call my cynical, but I have a hard time believing that will get a single Republican vote.
How much of a factor will that stimulus be in markets? Eventually it will be big but I think it's going to be a few months to digest what's happening now.
