The modest sell-off in Treasuries has been cut short by a spike in Covid-19 infections. But the decision to end ‘vital’ Fed programmes has not helped. Mr Mnuchin has said that he will work closely with his successor in a transition “if things get certified”. The lending can be revived but cancelling the ‘vital support’ smacks of ‘operation scuttle’ and a policy of scorched earth. Around 12m Americans are also set to see their emergency benefits expire at the end of this year.
The manner in which Covid-19 has raced through rural states is troubling. One by one, republican state leaders have been forced to accept the case for facial masks and social distancing with local hospitals overrun. The number of infections per 1 million population is now higher in many of these states than the more densely populated states. North Dakota (91,877) and South Dakota (80,336) are cases in point. New York Governor Andrew Cuomo (Democrat) has been criticised for his handling of the pandemic: but the infection rate for the densely-populated state is currently 32,037 per 1 million, nearly a third of North Dakota.
The failings of Republican leaders at a local level constitute an economic risk. The logistical challenges of rolling out mass vaccinations are also huge. Large areas of the rural community may miss out on the new vaccines. It does not help either when the current administration is refusing to talk with the Biden team over the rollout. And resistance to the vaccination across the US is running high, close to 50% in some surveys.
Summary
• Destructive Republicans still in charge
• Vaccine news is excellent
• But North and South Dakota tell a sorry story
