President Donald Trump is "very close" to reaching a stimulus agreement with US lawmakers to fight the coronavirus outbreak's economic damage that has sent markets plunging and disrupted businesses, Treasury Secretary Steven Mnuchin said Friday.
The fear surrounding the virus has pushed Wall Street indices into a bear market, shut down Disneyland and Broadway, and led major sports leagues to cancel or postpone their seasons, but Mnuchin called the slowdown a "short-term issue."
The president is committed to getting a "major stimulus package" through Congress, 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."
Mnuchin spoke after the Dow had its worst session since 1987, diving 10 percent in Thursday trading even as the US Federal Reserve moved to inject $1.5 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.
Uncertainty over the stimulus package and sharp partisan rhetoric was an exacerbating factor in Thursday's declines, where selling was also spurred by Trump's shock travel ban on Europe and the near-constant stream of event cancelations.
Mnuchin spoke with Democratic House Speaker Nancy Pelosi twice Friday morning and eight times on Thursday, according to Drew Hammill, Pelosi's deputy chief of staff, and media are reporting that Congress is expected to consider a package later in the day.
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, rejected the need to close markets and said he would be willing to fly commercial airlines. "Not everybody who has sniffles will have the coronavirus," Mnuchin said.
The Dow regained about 3.0 percent in middmorning trading Friday, retreating from the surge seen at the open.
The Fed made made an emergency interest rate cut last week, and on Wednesday is expected to lower its benchmark borrowing rate again from the current 1.0-1.25 percent range.
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