COVID-19

Wow! The U.S. economy added 467,000 jobs last month, keeping the unemployment rate in the 4.0% area. Also impressive is that there were large upward revisions from previous months. We say 'wow' because there was such negative sentiment prior to the release of the jobs number.

The US Treasury launched the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for state, local, territorial, and Tribal governments.

The National Emergency has been extended according to a letter from President Joe Biden to The Congress of the United States.

Despite positive polling, the Biden Administration's first major piece of legislation was successful because enough Democratic senators agreed to tow the party line. But the process did not occur as smoothly as some may have believed. We think that going forward, passing and implementing future major legislation will require a significant amount of political horse-trading. Even that will not assure victory, because each side will be seeking to satisfy their constituents, especially with the 2022 mid-terms looming in the background.

On Thursday, November 19, Treasury Secretary Mnuchin sent a letter to Fed Chair Powell indicating that he would be allowing most of the Fed's 13(3) emergency lending facilities to expire at year-end, and requesting that the Fed "return unused funds to the Treasury" in order for Congress to "re-appropriate $455 billion, consisting of $429 billion in excess Treasury funds for the Federal Reserve facilities and $26 billion in unused Treasury direct loan funds."

If you want to get a feel for municipal transportation credit, watch REM's video "Can't Get There From Here" which was filmed at a drive-in movie theater in Georgia in 2010. It's available on YouTube and the video is, well, "poor quality."

Targeted Infrastructure programs will be one of the featured revitalization tools used for stimulating growth in the US economy post the COVID-19 pandemic. Many observers have anticipated massive large-scale infrastructure programs, but that may not be viable at this time, given the financial capabilities of many state and local governments.