Fiscal boosts and bonds

Daily update

US President Trump has suggested that most US households could receive a USD2,000 cheque from the government. Such a move would require legislation. The bond market seems sceptical about Congressional action and is not currently pricing the probable deficit consequences. Bonds are instead focusing on dubious quality labor market signals, as a guide to Federal Reserve rate cuts.
There will be US fiscal stimulus early in 2026. Existing legislation and the probable government reopening will both add to GDP. If some tariffs are declared illegal, US firms will also receive a rebate (which would act as an additional fiscal stimulus). The boost to growth from this fiscal largesse will fade as the year progresses.
German final October consumer price inflation is of no market interest—this is one of the few German data points that is almost never revised. German inflation has been stable around the European Central Bank’s target since the start of last year, granting German consumers increasing spending power through rising real incomes.
Bank of England Chief Economist Pill speaks, but the remarks may be constrained by the political climate and the imminent budget. No fewer than seven Federal Reserve speakers are scheduled—it is questionable whether seven individual Fed speakers will improve markets’ understanding about the direction of policy.