UBS’s thoughts on the next round of stimulus

The expectation for another stimulus bill remains the same as it has been for weeks. UBS expects the Senate to act on a bill of limited scope in July that will eventually become law. They expect the bill to include the following: an extension of additional unemployment insurance assistance; more funding (and greater flexibility on use of that funding) for state and local governments; temporary liability protections for small businesses, schools, hospitals and other entities during the reopening process; funding for more COVID-19 testing; and additional targeted improvements to the small business lending program, the Paycheck Protection Program (PPP). They believe a final deal will cost around $1 trillion. While the above list covers the key components of a bill that could pass the Senate today, changes in the political environment over the next month may affect the scope and contours of the final bill.