The Week That Was 11/20

Treasury vs. The Fed?

Treasury Secretary Mnuchin announced plans to let several market support programs expire on December 31, including the Main Street Lending program as well as facilities designed to protect the Corporate and Municipal bond markets.  Mnuchin feels that these facilities have served their purpose.  Fed Chair Powell disagreed, stating that the Fed “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

Government intervention in markets is very rarely cost-free and is often accompanied by unintended consequences.  Markets are currently functioning without aid and the expiration of these programs is likely to have little market impact.  The Treasury has the ability to reinstate the programs if needed.

Retail Sales

October retail sales rose 0.3%.  September sales were revised lower, from 1.9% to 1.6%.

October sales were slower than expected, but the recovery from the March / April lows has been remarkable.  Retail sales in September and October were ahead of the pre-pandemic trend.  As with everything these days, the resurgence of the virus and new regulations may exact a toll in the short-term, as the world waits for vaccines to become widely available.


Initial jobless claims rose last week from 711,000 to 742,000.  Continuing claims fell from 6.8 million to 6.3 million.

Employment gains are slowing and there is a long way to go to recover all jobs lost due to the pandemic.  The first order of business is to control the spread of the virus, which is proving difficult. Gains in employment statistics will likely slow further as COVID continues to surge.