Experts skeptical about stimulus package after election

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Now that the election is here, our attention will turn to what happens in the fourth quarter of this year with respect to another stimulus package.

Many people are not confident that a deal can or will be made during this time.

“I’m skeptical that anything can get done in a lame-duck session,” said Kevin Grogan, managing director of the investment committee at Buckingham Wealth Partners.

Lame duck sessions are known for being unproductive and so if a stimulus package were to come together during this time it would be more of the exception than the norm.

Unfortunately, despite the fact that the economy grew at a record annualized rate of 33.1% in the third quarter of this year, postponing more stimulus aid until next year could stymie the economic growth that we have seen so far.

“The next major catalyst for the economy and markets is fiscal relief. But there are no training wheels. The lack of support during the fourth quarter will hurt consumers and small businesses,” said Brian Nick, chief investment strategist at Nuveen.

Some even speculate that the economy will not grow at all during the fourth quarter unless we see a new stimulus package.

If Trump is the victor after this election, and Republicans maintain control of the Senate, a lot of people think that a deal will happen after the election, perhaps immediately after.

How big this deal will be is hard to know but it is not out of the realm of possibilities that we could see something priced at around $1.5 trillion.

It will almost certainly contain more stimulus checks as well.

On the other hand, if the Democrats take the White House and the Senate then it’s very possible that we will not see a stimulus package until 2021, after the inauguration.

That package from the Democrats will likely be much larger than any package passed by the Republicans.

It will not surprise me to see it surpass $2 trillion.

You could expect to see better unemployment benefits, possibly wider eligibility for stimulus checks, and a host of other benefits.

“Stimulus will take precedence. In a blue wave sweep scenario, Democrats could get all that done very early next year,” Jim Smigiel, chief investment officer of nontraditional strategies at SEI said.

Smigiel also acknowledged the unlikely odds of a stimulus coming in the fourth quarter, though.

“Given the vitriol in Washington, that’s not likely to happen,” Smigiel said.

So buckle up for the fourth quarter because it is going to get real interesting when it comes to more relief aid coming.


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