Welcome to 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 US public policy and

financial markets.

It's Wednesday, January 27th at 11 a.m. in New York.

We're a week into the Biden administration in Democratic control of Congress and investors are already

starting to ask, what's taking so long getting another round of fiscal stimulus approved?

To those asking, we say dig in for some twists and turns over several more weeks, but the deal is likely to get done.

Unfortunately, it may be the journey that moves markets in the near term, not the destination.

First, let's explain why the media is reporting that Democratic leadership is setting mid to late

March as the expectation for completing the stimulus action.

It boils down to congressional process.

Given the tepid response of Senate Republicans to Democrat stimulus plans, it's unlikely legislation can get 60 votes in the Senate to avoid the filibuster.

So Democrats are likely to push legislation through a process called Budget Reconciliation, which permits the passage of certain bills with only a simple majority.

Much but not all of the proposed stimulus should be eligible for this process,

so Democrats should be able to control their own destiny on this bill.

Simple, right?

Not so much.

There's the challenge of getting all 50 Democratic senators to agree on what should be in the

bill.

Not easy given the party features both progressives and centrist.

Also, there's the painstaking reconciliation process itself,

which requires first passing a budget resolution

...