Trump jolts markets by delaying stimulus

Negotiations for a second Covid-19 stimulus package for the citizens of the United States have been ongoing for months. But on Tuesday, President Donald Trump shocked the markets by suddenly announcing that he was delaying the talks until after the 2020 presidential election. The prices of bitcoin, altcoins and mainstream assets fell shortly after.

“Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19,” Trump, who has been treated for Covid-19 with a drug that can have serious psychiatric side effects, said in a tweet. “We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country.”

No further stimulus package negotiations will take place before the election, Trump said in subsequent tweets, while remaining exuberantly optimistic about his political prospects: “Immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

The market did not share his enthusiasm: Stocks fell noticeably and bitcoin dropped about $200 before bouncing slightly. Its price at the time of writing (2.30 am in Hong Kong) was $10,565.

Bitcoin’s drop following the news appears to support the view that it continues to be correlated with traditional markets.