Mnuchin says U.S. economy could open in May, defying experts

spike

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Thursday that the American economy could start to reopen for business in May, despite experts’ emphasis on prolonged social distancing measures to defeat the coronavirus.

FILE PHOTO: U.S. Secretary of the Treasury Steven Mnuchin speaks during a news conference at the G20 Meeting of Finance Ministers in Buenos Aires, Argentina, July 22, 2018. REUTERS/Marcos Brindicci

Asked on CNBC whether he thought President Donald Trump could reopen the U.S. economy in May, Mnuchin said, “I do.”

“As soon as the president feels comfortable with the medical issues, we are making everything necessary that American companies and American workers can be open for business and that they have the liquidity they need to operate the business in the interim.”

U.S. economists and health officials on Thursday cautioned against bringing large numbers of people back to their workplaces too quickly. An influential model the White House is studying to predict the disease’s spread assumes current social distancing measures through the month of May.

“We need to have a plan, nationally, for reopening the economy,” Federal Reserve chair Jerome Powell said Thursday. “While we all want it to happen as quickly as possible, we all want to avoid a false start, where we partially reopen and that results in a spike in coronavirus cases and then we have to go back again to square one.”

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Thursday it was important that people continue to stay home.

“We’ve got to continue to redouble our efforts at the mitigation of physical separation in order to keep those numbers down and hopefully even get them lower than what you’ve heard recently,” he said.

Officials have warned Americans to expect alarming numbers of COVID-19 deaths this week, even as an influential university model here on Wednesday scaled back its projected U.S. pandemic death toll by 26% to 60,000.

The model assumes that Americans keep current social distancing measures in place through the month of May.

More than 15,700 Americans are reported to have died from COVID-19, a respiratory illness caused by the coronavirus, according to a Reuters tally, but officials worry the toll may be much higher.

(See a graphic of the spread of the coronavirus in the U.S. here here)

Trump on Wednesday said he hoped to reopen the economy with a “big bang” once the death toll from the virus is on the downslope. He did not give a timeframe for that reopening, but his chief economic adviser, Larry Kudlow, said on Tuesday it could take place in four to eight weeks.

A paper co-authored by Massachusetts Institute of Technology economist Emil Verner in March about the response to the 1918 flu pandemic found that cities that restricted public gatherings sooner and longer had fewer deaths – and ultimately emerged from that outbreak with stronger economic growth.

Weighing the economy against protecting people from infection or death is a “false tradeoff” he told Reuters in March.

“When the spread of the virus is under control, businesses will reopen, and people will come back to work,” Powell. “There is every reason to believe that the economic rebound, when it comes, can be robust.”

Reporting by David Lawder; Editing by Heather Timmons and Jonathan Oatis

Source Article

Next Post

United Airlines, Pfizer, KB Home and more

A United Airlines plane sits parked at a gate at San Francisco International Airport on March 06, 2020 in San Francisco, California. Justin Sullivan | Getty Images Check out the companies making headlines after the bell. United Airlines — Shares of the airline rose 3% after the market closed. Treasury Secretary […]