U.S. Treasury Secretary Steven Mnuchin said he doesn’t expect the coronavirus pandemic will trigger a U.S. recession, even as others ― including President Donald Trump’s former economic adviser ― say we’re likely already in one.
“We’re clearly going to have a slowdown,” Mnuchin said on ABC’s “This Week” on Sunday. “Later in the year, obviously the economic activity will pick up as we confront this virus.”
Mnuchin said the real issue at hand is not today’s economic situation but “what economic tools are we going to use to make sure we get through this.”
Trump’s former National Economic Council director, Gary Cohn, offered a bleaker immediate assessment of the economy on Friday because of a major halt in travel and consumer spending due to the virus. Fortunately, he believes there’s a light at the end of the tunnel.
“Most likely, I’d be willing to say, we are in a recession right now,” he said on CNN. “We are having negative growth right now and the market is pricing in that uncertainty. The good news is that we are starting from a very strong start, just three weeks ago, and when we get done with this public health crisis ― and I’m convinced we will get done with it, no one knows how long ― the market will be resilient enough to recover.”
Former Federal Reserve Vice Chairman Alan Blinder has also said that he “wouldn’t be one bit surprised” if data shows that a recession started this month.
“It takes months to get the data that would be relevant to a call like that. But it wouldn’t be a bit surprising to me,” he said on CNBC Wednesday.
The Trump administration’s economic plans amid the outbreak have included a proposed payroll tax cut, loans for businesses affected by the virus, and pressure on the Federal Reserve to further cut interest rates. The president’s declaration of a national emergency on Friday also freed up $50 billion in federal resources.
The House of Representatives on Saturday also passed a sweeping coronavirus financial aid package, which will provide free testing for the virus as well as paid leave to workers infected or needing to provide care to others and an expansion on unemployment insurance and emergency food assistance. The bill now goes to the Senate for its approval.
As of Friday, the stock market remains in a bear market, with the market having its worst week since October 2008. The U.S. unemployment rate remains at 3.5%, which is a half-century low.
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