US Treasury Secretary Steven Mnuchin downplayed fears of an economic recession due to the ongoing coronavirus (Covid-19) outbreak.
While he forecasts there will be a slowdown as the economy takes a beating from the pandemic, he does not expect a recession.
In an interview, ABC’s Jon Karl asked Secretary Mnuchin whether there will be a recession, as the coronavirus infection has caused US stock markets to stumble the past weeks.
“I don’t think so,” President Donald Trump’s top economic adviser told ABC’s “This Week”.
“The real issue is not the economic situation today. … This is a unique situation. We are going to have a slowdown. Later in the year, obviously the economic activity will pick up as we confront this virus,” he added.
NEW: Despite forecasting an economic slowdown, Treasury Secretary Steve Mnuchin tells @jonkarl he does not think the coronavirus pandemic will cause a recession: "Later in the year, obviously the economic activity will pick up as we confront this virus." https://t.co/XkLFkSaaAp pic.twitter.com/sBm0lCojMh
— This Week (@ThisWeekABC) March 15, 2020
Some sectors have warned of a possible economic recession in the country as the far-reaching pandemic is causing major travel bans. Those bans force businesses across the country to temporarily close.
What Tools Will We Use?
Secretary Mnuchin, however, sounded confident the US economy could weather the temporary downturn. He said, “the real issue is what economic tools” the government is going to use “to make sure we get through this.”
“This is a unique situation. We have a situation where travel has been grinding to a halt.”
He noted that the Trump administration “will use whatever tools we have” to ensure ample support to the economy.
“The real issue is not the economic situation today. The real issue is what economic tools are we going to use to make sure we get through this,” Mnuchin said.
The Treasury Secretary also assured that he was in “continuing talks” with Congress to tackle ways to support the airlines, hotels, cruise industries as well as small and medium companies through “lending, more liquidity, some type of stimulus,” Secretary Mnuchin said.
“As I have been saying, I think we are in the second inning of nine innings. And we will use whatever tools we need to make sure the economy and hard-working Americans get through this,” he added.
The coronavirus, which originated in Wuhan, the capital of Central China’s Hubei province, 655 miles away from Beijing, has so far infected over 175,000 people worldwide with a death toll of at least 6,713.
In the US, there are at least 3,485 coronavirus cases and 65 deaths across 49 states. West Virginia is the only state without a case.
Secretary Mnuchin also said Sunday that he is constantly communicating with Federal Reserve officials.
“They have certain tools. We have certain tools,” the Treasury Secretary added. “I can assure you he and I are in discussions, every day … and again, we are fully coordinated.”
The US Federal Reserve slashed rates to zero to lend more support to the economy during the coronavirus outbreak. This response came quicker than anyone — including the President — expected.