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Photo: Win McNamee/Getty Images

Within a day of tweeting that he was calling off bipartisan talks for a coronavirus stimulus deal, President Trump phoned House Minority Leader Kevin McCarthy and indicated he was worried by the stock market reaction and wanted a "big deal" with Speaker Nancy Pelosi, per two sources familiar with the call.

What we're hearing: Trump was spooked after seeing the instant drop in the stock market and intense backlash to his tweet, and he has since directed Treasury Secretary Steven Mnuchin to push for a more comprehensive relief bill before the election.

  • He wants a deal that would go beyond securing aid for the struggling airline industry and extending the small business Paycheck Protection Program.
  • Mnuchin swiftly acted on the president's directive and called Pelosi Wednesday evening to tell her negotiations were back on, per a Democratic congressional aide.

Why it matters: Few people on Capitol Hill thought a large-scale stimulus deal would be reached before Election Day, and it's still very unlikely both sides can compromise by then. However, Republicans did not expect Trump to be the one to walk away from the table, and they were even more stunned he did so in such a public way.

  • Washington leaders were even more baffled when, shortly after Trump said he wanted his team to abandon negotiations, he contradicted himself by responding to a headline citing Federal Reserve chair Jerome Powell calling for more fiscal stimulus and saying Congress has a low risk of "overdoing it." Trump's response: "True!" 
  • The sources say Trump told McCarthy in their Wednesday phone call that he agreed with Powell. Trump has long held the view that a bigger deal that delivers more money directly to Americans and businesses would help him win re-election.
  • The White House and McCarthy's office didn't respond to requests for comment.

Between the lines: A person who spoke with Trump yesterday said that while he would never use the word "regret" about scuttling the negotiations, they got the strong impression that Trump realized he had messed up tactically.

  • Trump himself immediately backtracked in a series of tweets later on Tuesday, trying to portray himself as willing to deal and to portray Pelosi as the intransigent one.

The catch: Trump may want a big deal — one where he'd spend several trillion dollars to help himself get re-elected — but that was never going to fly with Senate Republicans. They've long been wary of yet another massive pandemic relief package after all of the money Congress has already spent.

The latest: Trump, during an interview on Fox Business Thursday, said his team was "starting to have some very productive talks" on a bill.

  • "I said, look, we're not getting anywhere: Shut it down. I didn't want to waste time. But in any event, we got back — both sides very capable — we got back, we started talking again," the president continued. "And we're talking about airlines and we're talking about a bigger deal than airlines. We're talking about a deal with $1,200 per person, we’re talking about other things."

What's next: Democrats and Republicans are still hundreds of billions of dollars apart and disagree on what's needed in the bill, and with only 26 days until Nov. 3, an agreement by Election Day is still widely seen as unlikely.

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Photo illustration: Sarah Grillo/Axios. Photo: Hannelore Foerster/Getty Images

A face familiar to Wall Street is back as a central player that this time will need to steer the country out of a deep economic crisis.

Driving the news: President-elect Joe Biden is preparing to nominate former Fed chair Janet Yellen to be Treasury secretary.

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The future of U.S. politics, and all that flows from it, is in the hands of Georgia voters when they vote in two Senate runoffs on January 5.

Axios Re:Cap digs into the election dynamics with former Georgia Gov. Roy Barnes, a Democrat who served between 1999 and 2003.

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