Coronavirus impact on US economy 'short-term issue': Steven Mnuchin

US Treasury Secretary Steven Mnuchin speaks with reporters outside White House in Washington, DC, on March 13, 2020.
US Treasury Secretary Steven Mnuchin speaks with reporters outside White House in Washington, DC, on March 13, 2020.PHOTO: AFP

WASHINGTON (AFP) - US President Donald Trump is "very close" to reaching a stimulus agreement with US lawmakers to fight the economic damage from the coronavirus outbreak that has sent markets plunging and disrupted businesses, Treasury Secretary Steven Mnuchin said on Friday (March 13).

The fears surrounding the virus has pushed Wall Street indexes into a bear market, shut down Disneyland and Broadway, and led major sports leagues to cancel or postpone their seasons, but Mr Mnuchin called the slowdown a "short-term issue".

The President is committed to getting a "major stimulus package" through Congress, Mr Mnuchin told CNBC, but he did not provide specifics.

Options include a payroll tax cut and other ways to provide funds for people who cannot work because of the virus.

"There's no question there's a short-term economic issue, but we will get through this."

Mr Mnuchin spoke after the Dow had dived 10 per cent in Thursday trading, even as the US Federal Reserve moved to inject US$1.5 trillion (S$2.12 trillion) of cash into markets this week and broadened its purchases of US Treasury debt - both moves reminiscent of the global financial crisis in 2008.

Mr Mnuchin vowed in the interview that banks would have enough liquidity, saying once the virus is overcome "the economy will be stronger than ever".

He also encouraged people to buy stocks, rejecting the need to close markets, and said he would be willing to fly commercial airlines.

"Not everybody who has sniffles will have the coronavirus," Mr Mnuchin said.

The Dow regained about 5 per cent in early trading on Friday.

 
 

Since breaking out in China, the virus that causes Covid-19 has killed more than 5,000 people as of Friday and spread globally with cases topping 134,000, according to an AFP tally.

Health authorities have warned that the outbreak is already well-entrenched in the US: The state of Ohio likely has more than 100,000 people carrying the new coronavirus, its health department said on Friday.

Meanwhile, at least six US states have ordered schools to close as confirmed infections in the country climbed to more than 1,660 people.