Treasury Secretary Steven Mnuchin told lawmakers Wednesday that he believed the novel coronavirus would have a limited impact on the economy and praised the Federal Reserve’s emergency interest rate cut.
“This is an issue that’s going to affect the next year,” he told the House Appropriations Subcommittee on Financial Services and General Government on March 4, reported The Wall Street Journal. “It’s not a longer-term impact.”
Mnuchin also hailed the Fed’s surprise move to slash rates by 50 basis points Tuesday in response to what Fed Chairman Jerome Powell said was a “material change” in the economic outlook caused by the coronavirus fallout.
Powell said at a press conference Tuesday that “the spread of the coronavirus has brought new challenges and risks,” adding that “the outbreak has also disrupted economic activity in many countries and has prompted significant movements in financial markets.” He said he hoped the rate cut would provide a “meaningful boost” to the economy and buoy household and business confidence.
“The Fed getting ahead of the curve and providing the stimulus is consistent with their dual mandate,” Mnuchin said of the Fed’s move, reported The Wall Street Journal.
In a prepared statement to the subcommittee, Mnuchin said the Trump administration was working with international partners to curb the spread of the virus and minimize its impact.
“I first want to note that the Administration is closely monitoring the coronavirus and its effects on public health, as well as any effects on supply chains, markets, and the broader economy,” he said.
Mnuchin also said he would work with Congress on an emergency funding package to help respond to the challenges of the outbreak, which was ultimately agreed Wednesday.
$8.3 Billion Deal to Fight Coronavirus
Lawmakers on Wednesday came to an agreement on more than $8 billion in emergency coronavirus funding, with Senate Appropriations Committee Chairman Richard Shelby (R-Ala.) announcing the move in a statement.
“This should not be about politics; this is about doing our job to protect the American people from a potential pandemic,” Shelby said. “We worked together to craft an aggressive and comprehensive response that provides the resources the experts say they need to combat this crisis. I thank my colleagues for their cooperation and appreciate President Trump’s eagerness to sign this legislation and get the funding out the door without delay.”
The $8.3 billion proposed to combat the coronavirus is more than three times more than the $2.5 billion initially requested by the White House.
The bill is expected to be signed into law by President Donald Trump after clearing the House and Senate.
‘Bright Spot of Economic Growth’
Speaking to the House of Representatives’ Ways and Means Committee Tuesday, Mnuchin said he had confidence in the ability of the U.S. economy to weather the coronavirus storm.
“I think there’s no question the president’s economic policies are working,” Mnuchin told the committee.“The US is the bright spot of economic growth. The world growth has slowed down considerably and I could not be more pleased that we have at this point a very resilient US economy as we go into the experience of the coronavirus.”
In a prepared statement (pdf), Mnuchin told the committee that the administration’s economic policies of tax cuts, regulatory reform, and re-negotiated trade deals were “improving the lives of hardworking Americans.”
He pointed to labor market strength, noting historically low unemployment of 3.6 percent and a labor force participation rate among prime-age adults hitting an eleven-year high in January.
“America’s economic strength and competitiveness is a bright spot in the world as other nations experience headwinds,” Mnuchin said.