McConnell Says New Stimulus Bill Still Needed, Cites “Possibility” Of State, Local Aid

In the first indication that the Senate is willing to accept a Biden victory, moments ago Senate Majority Leader McConnell – in a notable change in tone – said a new COVID-19 aid bill is still needed by the end of 2020, and it is possible that there is a “possibility” the Senate will concede on the key Democratic demand of help for state and local governments.

Moments prior to this, he said that “claiming you win the election is different from finishing the counting.”

While markets remain too dazed to care, this suggests at two things: i) McConnell will concede to Democratic demands suggesting he won’t back Trump in forcefully challenging the election outcome and ii) rumors of the reflation trade’s death may have been greatly exaggerated.

That said, 10Y yields continued to high session lows, trading just above 0.76% (down from 0.94% overnight), as the unwind of the Blue Wave trade continues.