Welcome the thoughts on the market. I'm Michael Zezes, head of public policy research and municipal strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the intersection between U.S. public

policy and financial markets. It's Wednesday, December 9th at 11 a.m. in New York.

Let's check in on what's going on with Washington, D.C. The news coming out of America's capital that investors are paying close attention to with helped boost investor optimism about the economic recovery.

But we've been here before, with stimulus deals supposedly close only to collapse.

So how should investors think about the current stay to play?

In our view, we think investors shouldn't get too wrapped up in the nuances of the day-to-day negotiation noise, where disagreements on funding sources, state and local aid, liability protections, and stimulus checks are still to be resolved.

But the signal that's coming through to us is that investors can expect a reactive fiscal stimulus.

That is Congress finally striking a deal when they have to because of rising COVID caseloads

and weakening economic data.

This concept was part of our economist-based case

for the continuation of a V-shaped economic recovery in the US.

And it's possible that it could play out a bit sooner.

COVID cases have been rising, and last week's below expectation non-formed

payroll number may have shown lawmakers the economic risk and not providing fiscal assistance,

particularly as key deadlines approach at year end, such as the expiration of extended unemployment benefits.

That seems to have resulted in parties coalescing around a headline number of $900 billion in aid.

At this point, Treasury Secretary Munuchin has made a proposal around that number,

as has the bipartisan Problem Solvers Caucus, whose proposal is cited by both Congressional Democrats

and President-elect Biden is a good template for negotiations.

All of this is certainly progress, considering just a few weeks ago,

both parties were over $1.5 trillion dollars apart

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