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Trump claims stimulus talks are back on, two days after he shut them down

President Donald Trump gestures to the crowd of supporters during a campaign rally at the Allen County War Memorial Coliseum in Fort Wayne, Indiana, Nov. 5, 2018.

Carlos Barria | Reuters

President Donald Trump on Thursday said stimulus negotiators are “starting to have some very productive talks,” days after his stunning decision to shut down deliberations with top Democrats.

“I shut down talks two days ago because they weren’t working out. Now they are starting to work out. We’re starting to have some very productive talks,” he said during an interview on the Fox Business channel.

“I said look we’re not getting anywhere: Shut it down. I didn’t want to waste time. But in any event, we got back — both sides very capable — we got back, we started talking again,” the president continued. “And we’re talking about airlines and we’re talking about a bigger deal than airlines. We’re talking about a deal with $1,200 per person, we’re talking about other things.”

U.S. stock futures extended their gains slightly in premarket trading after Trump’s comments. As of 8:30 a.m. ET, Dow futures pointed to an opening climb of more than 240 points.

The office of House Speaker Nancy Pelosi, the top Democrat in negotiations with the White House, did not immediately respond to CNBC’s request for comment. Pelosi and Treasury Secretary Steven Mnuchin, who leads negotiations for the White House, resumed phone discussions about airline aid Wednesday.

Trump’s comments Thursday morning came two days after he announced on Twitter that he’d directed White House negotiators to abandon talks with Democratic leaders to strike a new Covid-19 stimulus deal.

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump tweeted Tuesday. 

That decision baffled economists and politicians alike since additional relief has widespread support from the Federal Reserve, Wall Street, Democrats in both houses of Congress, some Republicans and the American public. 

Still, the president said Thursday that he believes Pelosi will continue to work with the White House since both Republicans and Democrats believe additional fiscal support is warranted. He also continued to blame China for the public-health crisis and economic downturn caused by the coronavirus.

“She wants it to happen to, she doesn’t want it not to happen,” Trump said. “Because it’s so good for our country, we really need it. It wasn’t our workers’ fault, it wasn’t our airlines’ fault that China did this terrible thing to us.”

The Democrat-led House passed a stimulus bill last week that would have included the $600 per week in extra jobless benefits through January, send another $1,200 direct payment to most Americans and authorize a second round of Paycheck Protection Program loans.

But that bill’s $2.2 trillion price tag drew criticism from Senate Republicans, who’ve objected to Democrats’ calls for legislation they view as needlessly profligate. The GOP favors a smaller, more targeted approach with less funding for state and local governments.

Many of the nation’s top economic officials warn that political bickering and failure to pass additional protections for employers and workers could dampen the economic recovery from a recession earlier this year and stagnate the U.S. jobs market.

Fed Chairman Jerome Powell, a Trump appointee and one of the nation’s top economic officials, said just hours before the president’s tweets on Tuesday that the U.S. economic outlook could deteriorate again if Congress couldn’t reach a deal to release more relief.

Failing to reach a deal could “lead to a weak recovery, creating unnecessary hardship for households and businesses” and thwart a rebound that thus far has progressed more quickly than expected, he said at the time.

This is breaking news. Please check back for updates.

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