Steven Mnuchin, U.S. Treasury secretary, speaking at the World Economic Forum in Davos, Switzerland, January 23, 2020.
Adam Galica | CNBC
Treasury Secretary Steven Mnuchin is confident the U.S. economy will weather the downturn from the coronavirus outbreak, noting he does not expect a recession.
“Later in the year, obviously the economic activity will pick up as we confront this virus,” Mnuchin said Sunday on ABC. “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’s comments came after the U.S. stock market tumbled last week, ending the longest bull market on record. The Dow Jones Industrial Average and S&P 500 ended the week in a bear market, down more than 20% from record highs set just last month.
The market’s decline, along with the coronavirus outbreak that has left countries such as Italy in a virtual lockdown, has stoked fears of slower economic growth around the world. Nike closed all U.S. stores. Apple stores are only open in China. American Airlines also announced the suspension of long-haul flights.
More than 156,000 cases of coronavirus have been confirmed worldwide, according to data from Johns Hopkins University. In the U.S., more than 2,900 cases have been confirmed along with at least 57 deaths.
Still, Mnuchin said on Fox News Sunday he expects a “big rebound later this year.”
But Mnuchin’s confidence on the economy is not shared by everyone. Alan Blinder, an economist and former Federal Reserve vice chairman, told CNBC last week that the economy is probably already in a recession.
“I wouldn’t be one bit surprised if when we look back at the data, it is decided … that the recession started in March,” Blinder said Wednesday. “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.”
Gary Cohn, former National Economic Council director, also thinks the U.S. is already in a recession.
“This has really become a major public health crisis, which has in turn curtailed consumer demand,” Cohn told CNN on Friday. “Most likely, I’m willing to say, we are already in a recession. We are having negative growth right now and the market is pricing in that uncertainty.”
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