Americas

Treasury secretary Steven Mnuchin says he doesn't expect US recession from virus

WASHINGTON (BLOOMBERG) – Treasury Secretary Steven Mnuchin said he doesn’t expect the coronavirus pandemic to tip the US economy into recession, even though growth will slow as many businesses shut down operations for a time.

“Later in the year, obviously the economic activity will pick up as we confront this virus,” Mr Mnuchin said Sunday (March 15) on ABC’s “This Week,” one of two interviews on Sunday-morning talk shows.

“I expect we’ll have a big rebound later in the year,” he said on “Fox News Sunday.”

Mr Mnuchin spoke as many businesses in the US and around the world grind to a halt in response to the fast-spreading virus.

The country’s biggest cruise lines are suspending operations for a month, marking the most sweeping response yet by the industry after a series of coronavirus outbreaks at sea.

Hotels occupancy is dropping, Broadway has fallen dark, and airlines have idled planes amid travel bans globally.

“This is a unique circumstance,” Mr Mnuchin said at a Saturday press conference at the White House. “There’s no question, because of the things that we’re requesting to do, there are parts of the economy shutting down or slowing down dramatically.”

He said an US$8 billion (S$11.3 billion) emergency spending bill and a House-passed economic relief plan are only the first two innings of a nine-inning baseball game.

“We have a lot more we need to do with Congress,” Mr Mnuchin said. “We will make sure the economy recovers.”

Officials and regulators around the world are struggling to soothe markets with few tools available. Economies are tipping toward – or may already be in the midst of – recessions.

Major stock indexes have entered a bear market, ending an 11-year run that began under Mr Trump’s predecessor, President Barack Obama. The US$17 trillion US Treasury market is struggling with a lack of liquidity.

Mr Mnuchin and Federal Reserve Chairman Jerome Powell, who’s been frequently attacked by Mr Trump, are under pressure to ease investor concerns and bolster the economy.

Mr Trump, whose re-election campaign relies heavily on the economy, is keenly focused on the stock market as a proxy for his administration’s performance.

In a Saturday press conference giving an overview of the government’s response, Mr Trump pointed out that stocks saw a record daily jump as he declared a national emergency on Friday. He stayed silent on the steep losses experienced in the past days and weeks.

“The president is focused on the stock market because it’s just one indication of the economy that gives people confidence,” Mr Mnuchin said Sunday on ABC.

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