Turning to the US, with politics in Washington headed for a gridlock – a divided Congress and Biden in the White House – investors have pinned their collective hopes on the Fed offsetting the shock from an expected surge in US Coronavirus cases and the inevitable social distancing, lockdown type measures and lower mobility. The question at today’s FOMC meeting is to what extent Powell & Co are willing and able to offset another negative demand/supply shock if Congress doesn’t come through with a second fiscal stimulus package. However, since we’re still in the middle of a contentious election, don’t expect Powell & Co to come out guns blazing. There will probably be no smoking gun clue on new easing.
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