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A Depressing Easter Weekend: Donald Trump vs. Anthony Fauci, and Congress Gridlocks on Aid

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Insights and Market Perspectives

A Depressing Easter Weekend: Donald Trump vs. Anthony Fauci, and Congress Gridlocks on Aid

Author: Greg Valliere

April 13, 2020

THE SPIRIT OF RESURRECTION was sorely missing in Washington this weekend, as an epic battle looms between Donald Trump and Anthony Fauci; governors bicker on when the lockdown will end; and Congress gridlocks on desperately needed small business aid. Wish we had a better message on this Easter Monday . . .

PRESIDENT TRUMP WAS PORTRAYED as paralyzed in most of February and March in a devastating narrative in the New York Times yesterday morning, and Dr. Fauci later in the day that said it’s “obvious” that deaths could have been prevented had the administration moved more quickly — true, but perhaps he was indiscreet. Trump accepts no criticism, and he reacted predictably.

BY RE-TWEETING A MESSAGE from “Time to #FireFauci,” from a GOP activist, Trump made it clear that the iconic infectious disease expert is on thin ice. With Trump’s poll numbers slipping, we don’t think he can fire Fauci, but there little doubt that a dispute is imminent on when the economy will re-open.

TRUMP AND MANY OF HIS ADVISERS want an end of the lockdown by May 1, a date that the scientists — and many governors — consider aspirational. We think healthy young people in regions where infections are light may be part of a “phased” strategy of gradually re-opening the country, but could this come by May 1? Not in California or many other states.

BESIDES, THIS ISN’T ENTIRELY TRUMP’S CALL: Since he cited the Constitution and states’ rights in refusing to condemn reckless Florida Gov. Ron DeSantis, Trump can hardly order the states to re-open. That’s their call, and many governors — including influential Republican Gov. Mike DeWine in Ohio — won’t move until the scientists tell them it’s safe.

SO WHAT WILL FAUCI SAY? He hinted yesterday that a return to some normalcy could come “next month,” but that obviously could be as late as May 31. The result, we fear, is a hodgepodge of different state rules, with Florida and Texas going in one direction and other states acting more slowly — a prescription for clusters of new infections.

AT SOME POINT THIS WILL BECOME INTOLERABLE FOR FAUCI, and we take no joy in predicting that he will depart this administration by Memorial Day, a potential blow to public confidence — and Trump’s re-election prospects.
* * * * *
THE MOOD IS EQUALLY DYSFUNCTIONAL on Capitol Hill, where Republicans are insisting on a “clean” bill that only authorizes an additional $250 billion for small businesses, while Democrats want an extra $250 billion for hospitals, state and local governments and food stamps. Those provisions are coming, but GOP leaders want them in a sweeping fourth aid package this summer.

WE THINK THERE WILL BE A COMPROMISE, brokered by Steve Mnuchin, but it could be several days away — despite pleas from small businesses, who say they’re hanging on by a thread. Just getting enough members of Congress back to Washington for a vote could take until next week.

BOTTOM LINE: The good news, of course, is that deaths and new infections are falling in Europe and in some hard-hit areas in the U.S. The bad news is that rivalries are now re-emerging (including Andrew Cuomo vs. Bill de Blasio) that bode poorly for addressing this crisis.

AS WASHINGTON SENDS MIXED MESSAGES to the restive public, it strikes us that the saving grace is Fed Chairman Jerome Powell, determined to do whatever it takes to avoid a depression. He, thankfully, is no longer on thin ice.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

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Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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