Biden’s Inauguration Week

JANUARY 18, 2021 | BY Kaia Parv

Joe Biden takes the oath of office as the 46th president of United States on the 20th of January 2021. The event is both feared and hoped for as it marks the end of one of the most controversial presidencies in the U.S. history. President-elect Biden, however, will not be given any honeymoon period. The list of immediate issues, not to say national catastrophes, which require his attention is long.

First and foremost, Biden needs to deal with the COVID-19 crisis that has caused more than 400,000 Americans to lose their lives. Around 23.8 million have been infected since the start of the pandemic in early 2020. Biden is expected to immediately sign an executive order requiring wearing masks in federal establishments, as well as for interstate travel. Moreover, his inauguration speech is likely to urge Americans to wear masks in public spaces in order to slow the spread of the virus. When asked during the presidential debates whether we would consider imposing lockdowns or restrictions on movement, Biden did not indicate whether he would proceed with such measures. The recent civil unrests in the States have also created an atmosphere where extreme measures might not be accepted by the public.

The second major issue on Biden’s plate is the growing need for immediate financial support to individuals and businesses. The federal government stepped in during the initial crisis in March by pouring billions via CARES Act. A number of provisions are coming to an end, however, with millions of people still being out of work. The unemployment rate sits still near 6.7%. Jobs data, measured by non-farm payroll numbers or initial jobless claims, are showing signs of deterioration. NFP-s decreased by 140,000 in December, while 965,000 new claims were submitted during the first week of January. Initial claims should drop to at least 250,000 to consider the recession ended.

Biden has proposed US$ 1.9 trillion relief package that would provide US$ 1,400 dollar payments to individuals, US$ 15 hour federal minimum salary, and extending US$ 400 unemployment support until September. He has said to extend the forbearance on federal student loan payments, as well as federally backed mortgages. At this point 1 in 20 Americans rely on rent forbearance programs, and 1 in 15 mortgage loans is delinquent. Around US$ 350 billion of the proposed relief package is going to state and local governments that are struggling to meet their expenses with a record number of people out of work and businesses bankrupt, causing tax revenues to dry up. US$ 400 billion of the relief package is targeted at vaccination efforts to accelerate the deployment in order to re-open the parts of economy that are still impacted by the restrictions.

Other issues that Biden is expected to address immediately include ending travel ban on a number of Muslim countries, re-joining Paris climate accord, as well as re-establishing a higher quota for visas issued for professionals looking to work in the U.S. Biden has said to also issue executive orders to address criminal justice reform, racial equality measures as well as access to health care.

Undoubtedly Biden is facing a daunting task of re-uniting the country whilst tackling the worst health and economic crisis of last 100 years. With U.S. still being the number one economy in the world and U.S. dollar being the reserve currency, it is in our best interest to hope he succeeds.

Any opinions, news, research, analyses, prices or other information contained here are provided as general market commentary and do not constitute investment advice. FXPRIMUS does not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

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