US President Donald Trump gives a thumbs up upon returning to the White House from Walter Reed National Military Medical Center on October 05, 2020. Photo: AFP

US President Donald Trump on Tuesday called off talks on a new stimulus plan until after the election, accusing Democrats of not negotiating in good faith.

“I have instructed my representatives to stop negotiating until after the election,” he wrote in a tweet.

The decision sent Wall Street stocks plunging and upended recent progress made in the long-stalled talks after Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi restarted negotiations last week.

The two sides were trying to reach an agreement on the size of the new stimulus package following the expiration of parts of the $2.2 trillion CARES Act passed as the coronavirus pandemic hit.

Markets that had been holding steady all day sunk into the red after Trump’s tweet, with the Dow dropping 1.3% and Nasdaq 1.5% lower as of 1925 GMT.

Pelosi’s most recent proposal would cost $2.2 trillion, however Trump cited an incorrect figure for the bill and accused her of wanting “to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19.”

“We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith,” he said.

He said he told Senate Majority Leader Mitch McConnell to focus the Republican-controlled chamber on confirming Amy Coney Barrett to the Supreme Court seat vacated last month by the death of Ruth Bader Ginsburg, which would give conservatives a solid six-to-three majority.

The announcement to torpedo any chance of new aid until after the election came just hours after Federal Reserve Chair Jerome Powell said the US economy would recover “stronger and faster” with more government stimulus to help workers and businesses.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in an address to an economics conference.