U.S. government debt prices were lower on Friday morning as traders monitored news of potential new fiscal stimulus in the United States.
At around 1.45 a.m. ET, the yield on the benchmark 10-year Treasury note rose to trade at 0.6692%. The yield on the 30-year Treasury bond was trading higher at 1.4077%. Yields move inversely to prices.
It comes after Treasury yields dropped on Thursday on the back of weak jobless claims.
In the meantime, Democrat lawmakers are reportedly working on a small stimulus package as the U.S. economy keeps grappling with the implications of the coronavirus pandemic.
The economic calendar is thin Friday with only durable goods due to be published at 8:30 a.m. ET.
Meanwhile, New York Fed President John Williams will speak at 9 a.m. ET and at 3:10 p. m. ET.
There are no Treasury auctions scheduled.
A day after President Donald Trump refused to promise a peaceful transfer of power if he loses the 2020 election, lawmakers pushed back on his statements.
“I have confidence that he won’t get away with saying, for example, I won with … the vote on the ground, the vote in the mail doesn’t count, and the rest of that,” House Speaker Nancy Pelosi, D-Calif., told reporters on Thursday.
At a press conference Wednesday, Trump said, “we’ll have to see what happens,” when it comes to whether he would peacefully hand over his office. “The president will accept the results of a free and fair election,” White House press secretary Kayleigh McEnany told reporters Thursday.
“I’ve been complaining very strongly about the ballots. And the ballots are a disaster,” Trump said, seemingly referring to mail-in ballots. Trump has repeatedly cast doubt on the legitimacy of mail-in ballots as a voting mechanism, claiming, without evidence, that they are susceptible to massive fraud. Many more voters are expected to vote by mail this election as a health precaution due to the ongoing coronavirus pandemic.
At a congressional hearing on Thursday, Federal Bureau of Investigation Director Christopher Wray said the agency has not historically seen “any kind of coordinated national voter fraud effort in a major election, whether it’s by mail or otherwise.”
Democrats have become increasingly concerned about how the unusual circumstances created by the pandemic will influence the outcome of the election and transition of power if former Vice President Joe Biden, the Democratic nominee, does win the electoral vote. With more voters expected to vote by mail in the election, many expect the race will be impossible to call on Election Day unless one candidate wins in a landslide.
That could leave room for candidates to cast doubt on the outcome of the election. Social media companies are already preparing for the possibility of one candidate prematurely claiming a victory. And with one Supreme Court seat open following the death of Justice Ruth Bader Ginsberg last week, a more conservative court may be left with the deciding vote on the election outcome if it ends with a legal challenge.
At a Senate Judiciary Committee meeting Thursday, Chairman Lindsey Graham, R-S.C., said he would accept whatever decision the Supreme Court decided if the election results reached that point. Graham’s committee is tasked with reviewing judicial appointees and said he would support Trump’s efforts to fill Ginsburg’s vacant seat, contradicting his statements in 2016 saying the next president should make the appointment if a vacancy occurred close to the election.
“Bottom line is whatever the court decides I will accept,” Graham said Thursday. “Al Gore’s greatest legacy in many ways, to me, is what he did after he lost. He accepted a result of the Supreme Court that was 5-4, like 500 votes in the state of Florida. How many places in the world would power peacefully transfer under those circumstances? How many places in the world where you actually have a peaceful transfer of power to begin with?”
Graham added, “there is no alternative to a peaceful transfer of power.”
“The winner of the November 3rd election will be inaugurated on January 20th,” Senate Majority Leader Mitch McConnell, R-Ky., said in a tweet Thursday. “There will be an orderly transition just as there has been every four years since 1792.”
Some Twitter users pointed out that McConnell’s language left room for interpretation, given many votes are expected to not yet be counted as of Nov. 3.
Several other Republicans reaffirmed a peaceful transition in statements on Twitter, though they did not call out Trump by name or directly reference his comments.
“Fundamental to democracy is the peaceful transition of power; without that, there is Belarus,” tweeted Sen. Mitt Romney, R-Utah, who has been critical of Trump in the past. “Any suggestion that a president might not respect this Constitutional guarantee is both unthinkable and unacceptable.”
“As we have done for over two centuries we will have a legitimate & fair election,” tweeted Sen. Marco Rubio, R-Fla. “It may take longer than usual to know the outcome, but it will be a valid one[.] And at noon on Jan 20,2021(sic) we will peacefully swear in the President.”
House Majority Leader Kevin McCarthy, R-Calif., said Thursday, “There will be a very peaceful transition,” according to The New York Times, adding that the same question should be asked of Democrats like “Hillary Clinton, who said never concede the race.”
Clinton’s comments about not conceding the race referred to the potentially incomplete results that could come out on Election Day due to the expected surge in mail-in voting. In an interview released in August, she said that Biden “should not concede under any circumstances” on Election Day given that it could take more time to find out the winner.
Former Wisconsin Gov. Scott Walker, a Republican, wrote on Twitter that, “Smart candidates never concede anything before an election. They focus on what it takes to win.”
Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, testifies before the Senate Health, Education, Labor and Pensions (HELP) Committee hearing on Capitol Hill in Washington DC on June 30, 2020 in Washington, DC.
Kevin Dietsch | AFP via Getty Images
White House coronavirus advisor Dr. Anthony Fauci told Congress on Wednesday “it might take some time” for FDA-approved inoculations for Covid-19 to become available because of the “rigorous clinical testing required” to develop a safe and effective vaccine.
Still, he added, there is “growing optimism” that scientists will find one or more safe and effective vaccines by the end of the year or early 2021.
In prepared remarks for delivery at a Senate Appropriations Subcommittee hearing, Fauci touted vaccines by Moderna, Pfizer, AstraZeneca and Johnson & Johnson, which announced earlier in the day that it began a phase three trial testing of its vaccine. J&J is the fourth drugmaker backed by the Trump administration’s Covid-19 vaccine program Operation Warp Speed to enter late-stage testing, behind Moderna, Pfizer and AstraZeneca.
Fauci said a fifth vaccine, by Novavax, is expected to begin a late-stage testing in October.
“A safe and effective vaccine for SARS-CoV-2 will be essential to stopping the spread of infection, reducing rates of morbidity and mortality, and preventing future outbreaks,” the director of National Institute of Allergy and Infectious Diseases said.
President Donald Trump has insisted that the U.S. could have a safe and effective vaccine by the end of October and have enough vaccine doses to inoculate every American by April. The president’s comments are at odds with his own health officials and have fueled concerns that politics, not science, will influence the vaccine approval process.
Fauci has said there is “no guarantee” that scientists will find a safe and effective vaccine. If they do find one, he has said the U.S. can start thinking about getting back to some form of normality” toward “the middle to end of 2021.”
At a Senate hearing last week, the head of the Centers for Disease Control and Prevention said he expects vaccinations to begin in November or December, but in limited quantities with those most in need getting the first doses, such as health-care workers and the elderly. The CDC director, Dr. Robert Redfield, said it will take about “six to nine months” to get the entire American public vaccinated and that the U.S. would be able to resume “regular life” by the third quarter of next year.
In his remarks scheduled for Wednesday’s hearing, Redfield said the agency continues to work to prepare public and private health systems to deliver a safe and effective vaccine if and when one is available.
He said the CDC is working closely with the Advisory Committee on Immunization Practices, an outside group of medical and public health experts who develop recommendations on the use of vaccines in the United States. The committee is scheduled to hold a meeting on vaccines in October.
Redfield promised Congress that any CDC recommendation about who should get a vaccine and when will be “grounded in guidance from the country’s foremost experts on immunization science.”
He said some some state and local health departments have already built infrastructure that would address vaccine response needs. In Chicago, for example, health officials developed an app to communicate directly with residents who may be positive with the virus, he said. The app has since been adapted and now allows users to register to receive a vaccine once one becomes available, he added.
While it remains unclear how long the pandemic will last, Covid-19 “activity will likely continue for some time,” Redfield said.
He urged Americans to get a flu vaccine as the circulation of the coronavirus and influenza “could place a tremendous burden on the health care system.”
J.P. Morgan Chase CEO Jamie Dimon
“A wealth tax is almost impossible to do,” he told CNBC-TV18 at the J.P. Morgan India summit on Tuesday when he was asked whether he’s in favor of such a proposal put forth by several Democrats.
“I’m not against having higher tax on the wealthy. But I think that you do that through their income as opposed to, you know, calculate wealth which becomes extremely complicated, legalistic, bureaucratic, regulatory, and people find a million ways around it. I would just tax income,” he said, suggesting that it’s harder to cheat on such a tax because income is “given.”
The wealthy in the U.S. have started preparing for tax increases that are likely to come in the coming years as government deficits at both state and federal levels rose due to the Covid-19 pandemic. Governments have increased spending to manage the health and economic crises, which at the same time caused their revenue to fall.
A study published last year by the Organisation for Economic Co-operation and Development found that the U.S. lost more tax revenue than any other developed country in 2018, largely due to U.S. President Donald Trump’s tax cuts.
Democratic presidential nominee Joe Biden had said that he would roll back most of Trump’s multitrillion-dollar tax cuts — which some reports said benefited businesses and higher-income individuals the most.
But Dimon said the president’s tax policies are among some of the “very good things” that he’s done for the U.S. economy. He explained that the U.S. has traditionally been a “red tape society” with a bureaucracy that “slows down a lot of business.”
“And I remind people, the world, when you slow down the economy, you are hurting the disadvantaged more than anybody else,” he said.
Dimon also said that governments should put more thought into how taxes are structured so that the economy can grow.
“There’re taxes which will slow down growth, like taxes on capital formation, or labor; and there’re taxes which will not affect growth like taxes on, you know, well-to-do people like me,” said Dimon.
“And I just think there should be far more thought about taxation … if you want an active, healthy growing economy.”
Ruth Bader Ginsburg to be first woman to lie in state at Capitol after lying in repose at Supreme Court
People look at candles and placards placed to mourn the death of Associate Justice Ruth Bader Ginsburg at the Supreme Court in Washington, September 20, 2020.
Joshua Roberts | Reuters
The late Justice Ruth Bader Ginsburg this week will become the first woman to lie in state at the U.S. Capitol. She is only the second justice of the Supreme Court to be honored in that way.
Services for the justice, who died Friday at 87-years-old, will begin on Wednesday morning, starting with a private ceremony at the Supreme Court’s Great Hall for Ginsburg’s colleagues, family and close friends. She will then lie in repose at the top of the Supreme Court’s front steps on Wednesday and Thursday.
The public is invited to pay its respects between 9 a.m. and 10 p.m. on both days, the court said.
On Friday, Ginsburg will lie in state at the U.S. Capitol Building, according to House Speaker Nancy Pelosi, D-Calif. Pelosi said a formal ceremony would take place on Friday morning. As a result of the Covid-19 pandemic, it will be limited to invited guests.
Following the services, an interment ceremony will be held next week for Ginsburg at Arlington National Cemetery, where her husband was buried in 2010.
The announcements about Ginsburg’s services came hours after President Donald Trump said that he has reduced his list of potential replacements to just five names, and intends to formalize a pick by the end of the week.
Trump said that he wanted to wait until after Ginsburg’s services, out of respect. The justice has become a cultural icon and hero to many on the left.
Ginsburg’s death has prompted national mourning, alongside a fierce partisan firestorm being waged over her successor.
Democrats, including presidential nominee Joe Biden, have urged the president to delay selecting a new nominee until after Election Day, in line with the GOP’s stance in 2016, when former President Barack Obama’s efforts to name Merrick Garland to the bench were blocked. But Trump and Senate Majority Leader Mitch McConnell have said they intend to move forward without delay.
Ginsburg, appointed by former President Bill Clinton, was the second woman ever to sit on the Supreme Court, after the retired Justice Sandra Day O’Connor, and was the first female justice to pass away. The only other justice to lie in state at the Capitol, according to a website maintained by the House of Representatives, was former Chief Justice William Howard Taft, who was also a U.S. president.
Democratic U.S. presidential nominee and former Vice President Joe Biden makes a fist as he answers questions from reporters after a speech about the effects on the U.S. economy of the Trump administration’s response to the coronavirus disease (COVID-19) pandemic during an appearance in Wilmington, Delaware, September 4, 2020.
Kevin Lamarque | Reuters
LONDON — Democratic presidential nominee Joe Biden has become the latest U.S. lawmaker to warn the U.K. government about plans to potentially break international law.
The U.K. government published legislation last week that, if approved by British lawmakers in its current form, could override previously legislated Brexit commitments on the Irish border issue. The plan has resurfaced old disagreements with the European Union, sparked opposition from some British lawmakers, and caused concern among a number of American politicians.
“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit,” Biden said on Twitter late Wednesday.
The U.K. agreed with the European Union at the end of 2019, as part of its departure from the bloc, that state aid granted to Northern Ireland which would impact trade with the EU would need approval from Brussels. This commitment, which was translated into law in January, aimed to prevent a harder border between Northern Ireland (a member of the U.K.) and the Republic of Ireland (a member of the EU) and respected the Good Friday Agreement — a U.S. brokered deal that brought peace between both parts of the island in the late 1990s.
The bill — called the Internal Market Bill — would also potentially change requirements that Northern Irish firms complete export summary declarations when shipping goods to the mainland.
“Any trade deal between the U.S. and U.K. must be contingent upon respect for the Agreement and preventing the return of a hard border. Period,” the presidential hopeful also said via Twitter, suggesting a trade deal with the United States could be at risk if Biden enters the White House.
House Speaker Nancy Pelosi warned last week that there cannot be a trade agreement with the U.K. if the latter chooses to breach international law. Four congressmen wrote a letter to U.K. Prime Minister Boris Johnson earlier this week outlining their concerns, according to the BBC.
In reaction to Biden’s comments, Edward Argar, the U.K.’s junior health minister, denied Thursday that the peace deal was at risk.
The British government has put on a charm offensive this week with Dominic Raab, the foreign secretary, traveling to Washington to reassure lawmakers about the plans.
In a press conference with U.S. Secretary Mike Pompeo, Raab said: “Our commitment to the Good Friday Agreement and to avoid any extra infrastructure at the border between the north and the south is absolute.”
A U.S. flag flutters in the wind.
Gary Hershorn | Corbis News | Getty Images
SINGAPORE — The U.S. is still globally dominant in many areas including finance and technology — but it’s not clear if the world’s largest economy remains the leading power that other countries look up to, said experts during a debate at the Singapore Summit.
Speaking on the third day of the virtual conference, they discussed whether “A Leaderless and Divided World will be the New Normal.”
The debate took place against the backdrop of a shifting global order in which the U.S. — widely considered the main superpower — is seen retreating from international organizations it’s led for years, while China appears to be rising and challenging American dominance on several fronts.
One of the speakers, Ian Bremmer, president of political risk consultancy Eurasia Group, said he saw a world without leadership in the foreseeable future.
“If there was going to be true leadership, it would need to come from” the U.S., he said. He pointed out that the U.S. is still globally dominant, with its tech firms growing stronger during the coronavirus pandemic, the U.S. dollar’s role as the main reserve currency and strength of American banks.
But those strengths are also why the U.S. lacks the interest to lead, said Bremmer.
A world without a leader doesn’t hurt the U.S. the way it hurts other countries, he added. “The Americans are not going to be hugely interested or feel the impulse to fill that vacuum in the near term, so I believe that we’re going to be leaderless and divided going forward for the foreseeable future.”
However, Niall Ferguson, Milbank Family senior fellow at the Hoover Institution at Stanford University, argued that the leadership of the U.S. has in fact been “very striking” this year. It can be seen in the U.S. Federal Reserve providing financial leadership during the depth of the pandemic-induced crisis and Washington showing technological leadership in campaigning against Chinese tech firm Huawei, he said.
He also added that even if the U.S. did not step up as the global leader, someone else will because the world needs one.
“The world has an inherent need for leadership. If the U.S. genuinely can no longer provide it, someone else will. Perhaps China, perhaps — who knows — a European Union who now seems to have its own relatively strong leadership in Berlin and Paris,” Ferguson said.
Taking sides: U.S. or China?
The debate also centered on China’s rise as a global power and its attempt to fill the leadership void left by the U.S.
But the experts agreed that China is still far from playing a leading role on the international stage.
China itself has repeatedly said it’s not interested in replacing the U.S. or in exporting its ideology globally, said Yan Xuetong, dean of the Institute of International Relations at Tsinghua University.
Still, the U.S.-China rivalry may force other countries to choose sides. Yan noted that increasingly, countries are seen siding with China on economic issues and relying on the U.S. for security. He cited Singapore, Japan, Germany and France as example of those who have taken such a stance.
Ngaire Woods, dean of University of Oxford’s Blavatnik School of Government, agreed that countries may need to “selectively cooperate” with either the U.S. or China.
In fact, the U.S.-China competition could be an opportunity for smaller countries to push for changes they would like to see in international bodies such as the International Monetary Fund and World Bank, said Woods, who’s a professor of global economic governance.
“We’ve seen every international institution changed and get pushed to listen to more of its members,” she said.
“In other words, for the third countries in the world, the smaller countries, the new competition between China and United States across these institutions does not spell doom and gloom. It spells an opportunity for other countries to start playing off those superpowers and push further for the changes they’ve been wanting in those institutions themselves.”