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The stalemate in Washington over further economic relief will lead to slower-than-expected growth in the fourth quarter, Goldman Sachs said in a note to clients Thursday.
Democrats and Republicans have remained far apart on a new relief package for months, with Senate Republicans declining to take up the multi-trillion bill passed by the House in May and Democratic leaders objecting to smaller proposals from the Republicans. The death of Supreme Court Justice Ruth Bader Ginsburg lowered Wall Street expectations for a deal before the election, and Goldman said combining relief programs with the government funding agreement now seems unlikely.
"We had previously assumed that Congress would attach a $1 trillion stimulus package to the continuing resolution at the end of this month that would include partial extension of the extra unemployment benefit and additional PPP loans. We now think that any further stimulus will wait until early 2021," the note said.