Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

A host of alarming new signs suggest that the U.S. economy is on track to deteriorate even faster than had been forecast. A huge reason: A year-end COVID rescue package now looks unlikely.

Why it matters: One of the biggest failures of the current administration and Congress will be a Day One problem for President-elect Joe Biden — and an urgent test of his theory that Republicans will be more willing to work with him once President Trump is gone.

State of play: Republican and Democratic lawmakers have agreed for months that the economy would suffer without stimulus, but things may soon deteriorate faster than they forecast.

  • COVID-19 cases, hospitalizations, and deaths are up throughout the country, in the absence of any national containment strategy.
  • Some state and local governments are reinstituting, or talking about reinstituting, lockdowns. Including for schools.
  • Many restaurants that survived via outdoor eating will soon be forced to take down their tents as cold weather arrives.
  • It wouldn't quite be like March, when scientists knew much less about how the virus was transmitted, but it could cause many businesses to yearn for the halcyon days of summer 2020.

Reality check: Biden spoke to House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on Thursday about the need to pass a stimulus bill during the lame-duck session of Congress. But the reality is that the Republican Senate and the Democratic House remain very far apart on priorities.

  • The Senate Republican conference is pushing for a highly-targeted bill, while House Speaker Nancy Pelosi maintains she won't compromise on anything smaller than $2.2 trillion.
  • “That snag that hung us up for months is still there,” Senate Majority Leader Mitch McConnell said earlier this week.
  • Meanwhile, January's two Senate runoff races in Georgia will pull more attention from stimulus talks, and also could cause each side to hold out longer — hoping for post-election leverage, even though Americans will suffer in the meantime.
  • There's been a change in top negotiators, with the more conciliatory Treasury Secretary Steven Mnuchin replaced by McConnell.

The bottom line: Many Republicans have indicated that they plan to return to their traditional orthodoxy of fiscal responsibility, despite driving up the national debt by trillions of dollars under Trump. This could make Biden's job much harder.

  • But one massive plus for Biden is that lawmakers will no longer be held hostage by the politics of an upcoming election, and members may be more willing to concede with a new leader in the White House.

Go deeper

Biden's Day 1 challenges: Systemic racism

Photo illustration: Sarah Grillo/Axios. Photo: Kirsty O'Connor (PA Images)/Getty Images

Advocates are pushing President-elect Biden to tackle systemic racism with a Day 1 agenda that includes ending the detention of migrant children and expanding DACA, announcing a Justice Department investigation of rogue police departments and returning some public lands to Indigenous tribes.

Why it matters: Biden has said the fight against systemic racism will be one of the top goals of his presidency — but the expectations may be so high that he won't be able to meet them.

Mnuchin's plan to shift unspent Fed funds

Illustration: Aïda Amer/Axios

A move by Treasury Secretary Steven Mnuchin could handcuff his likely successor Janet Yellen's ability to immediately restart Fed economic programs.

Driving the news: Mnuchin is planning to shift $455 billion in unspent CARES Act funds into a special account that would require Congress' permission to access, Bloomberg reports.

Paul Ryan calls on Trump to concede race and end lawsuits

Paul Ryan and Joe Biden after the vice presidential debate in 2012. Photo: Justin Sullivan/Getty Images

Former House Speaker Paul Ryan (R) on Tuesday called on President Trump to concede the election to President-elect Biden and "embrace the transfer of power," in an address at a financial conference first reported by Politico.

Why it matters: Trump has continued to deny that he lost the election, despite his administration granting so-called "ascertainment" on Monday, allowing the transition to formally begin.