House Speaker Nancy Pelosi said she was “optimistic” about a coronavirus pandemic relief deal after the Trump administration made concessions on coronavirus testing and tracing ahead of a Tuesday evening deadline to reach an agreement, the Financial Times reported.
- Why this matters to the crypto world:
1. Because the price of bitcoin and equities have been strongly correlated in recent months. Because the stimulus package would be a boost for stock markets, it could also provide a lift to the price of cryptocurrencies.
2. Crypto investors have been betting all year that the flood of government and central bank spending to fight the pandemic-caused economic slowdown will eventually lead to inflation, which would also be beneficial for cryptocurrencies.
3. All the stimulus is calling into question the independence of the U.S. Federal Reserve, which in the interest of preventing economic ruin in the short term has been basically printing money with abandon, leaving itself open to criticism about the mountain of debt these spending sprees is creating.
- Meanwhile, Pelosi (D-Calif.) said in a Bloomberg Television interview that progress was being made on "key provisions" and legislative language is being drafted.
- Senate Majority Leader Mitch McConnell (R-Ky.) said the Senate will take up the stimulus package if Pelosi and Treasury Secretary Steven Mnuchin reach an agreement and the resulting measure passes the House, Bloomberg reported.
- McConnell didn't say whether he'd back the measure. Several GOP senators are backing a much smaller package. The White House has proposed a $1.8 trillion stimulus package while the House Democrats are holding out for $2.2 trillion.
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