Markets Rally on News of Pfizer’s Coronavirus Vaccine

The U.S. Chamber of Commerce voiced optimism on Monday that a Biden administration could break the political gridlock that has stymied legislative cooperation between Democrats and Republicans in Congress and called on lawmakers to quickly put aside their differences and pass legislation to bolster the economy.

The expression of hope came after the traditionally right-leaning business lobbying group shifted away from President Trump this year, backing several House Democrats ahead of the 2020 election amid frustration with the White House’s trade and immigration policies.

“The time for campaigning has come to an end, and now we’ve entered the time for governing,” said Neil Bradley, the Chamber’s executive vice president and chief policy officer, said on a call with reporters.

Mr. Bradley called on lawmakers to pass another stimulus bill before the end of the year and said that he would like to see the Biden administration prioritize an infrastructure package next year. He said that the recovery from the recession had been uneven and that the group did not expect the jobs that had been lost as a result of the pandemic to be recovered until 2022.

The chamber’s leftward shift has only gone so far. Mr. Bradley said that the group, which opposes President-elect Joseph R. Biden Jr.’s plan to reverse some of the Trump tax cuts, is supporting the Republican Senate candidates in runoff elections in Georgia in January.

Although Mr. Trump has yet to concede defeat, Mr. Bradley said that a smooth transition would be preferable for the economy. It is unclear if the president would back a stimulus bill before leaving office, but the chamber is pushing for him to do so.

“President Trump was quite vocal heading into the election about the need for additional Covid relief,” he said.

The Federal Reserve said weaknesses in the financial system were worsening as the coronavirus pandemic drags on, in particular pointing to high levels of business debt and the risk that households could find themselves in tough financial positions as government relief programs run dry.

“Most Covid-related support for households has already expired or will expire in the coming months, which risks increasing financial stress for many low- to moderate-income households,” the central bank said in its twice-annual financial stability report, released Monday. “Strains associated with the performance of household debt may worsen significantly and affect lenders throughout the financial system.”

The Fed flagged high business debt as a potential vulnerability.

“Historically high levels of business debt and the weakening in household finances could pose a significant medium-run vulnerability for the financial system,” the report said.

Fed staff members also provided a retrospective on March turmoil in the market for government bonds as part of the report. The Treasury market seized up early in the pandemic, prompting a large-scale intervention from the central bank — and raising questions about a market that is supposed to be very safe.

“Large-scale sales of U.S. Treasury securities by foreign investors likely contributed to the March turmoil,” according to the Fed, noting that dollar liquidity needs and foreign exchange intervention most likely drove some of the selling.

A type of hedge fund trade may also have factored in, though it’s difficult to nail down how much thanks to a lack of data on such trades. Using proxies, staff members concluded that “the reduction in hedge fund Treasury positions may have contributed notably to Treasury market volatility” but “the evidence that large-scale deleveraging of hedge fund Treasury positions was the primary driver of the turmoil remains weak.”

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