COVID-19: Mnuchin Says May Economy Restart Possible; Powell Sees ‘Robust’ Recovery

By Gina Lee, Geoffrey Smith and Kim Khan

Investing.com - U.S. Treasury Secretary Steve Mnuchin said Thursday the U.S. economy could open up next month, while Federal Reserve Chairman Jay Powell said if certain criteria are met the economy could see a fairly quick rebound in the second half of the year.

When asked if the U.S. economy could start to reopen in May, Mnuchin told CNBC “I do.” The economy could restart “as soon as the president feels comfortable with the medical issues,” he added.

In a webinar Q&A, Powell said with regards to the U.S. that “when the virus does run its course … we would expect there to be a fairly quick rebound” and that most people expect that to be in the second half of the year. He said as long as the government supports people, that people stay home and healthy and that policy experts have a good plan for restarting the economy the country could be “back on the road to a recovery fairly quickly and that can be a robust recovery”.

And even given all the money the Fed is pumping into the economy, Powell said “one thing I don’t worry about is inflation right now.”

New York Governor Andrew Cuomo said that there were 799 death in the state yesterday, the highest level yet, and that funeral directors are being brought in to help with the number of dead. Cuomo also noted the 1928 Spanish flu came in three waves and that people “can’t assume that because we are seeing some positive signs this will be over soon or that additional waves won’t hit.”

U.S. Senate Majority Leader Mitch McConnell failed to win agreement from Democrats for unanimous consent for $250 billion more for small business lending. It was expected Democrats would want to add some of their priorities to any bill for further funding of the program.

U.S. jobless claims rose by 6.61 million last week, offering fresh evidence of the dramatic decline in the economy caused by the Covid-19 pandemic. This was more than the 5.25 million expected but slightly less than the previous week's record number, which was revised up to 6.87 million. Ongoing claims rose to 7.455 million from 3.059 million a week earlier.

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The Federal Reserve rolled out a $2.3 trillion effort to bolster local governments and small and mid-sized businesses in its latest move to keep the U.S. economy intact.

Europe:

Germany posted its highest growth rate in infections in five days, along with its biggest daily death toll of 333. Health Minister Jens Spahn told Handelsblatt the federal government will discuss a partial easing of lockdown restrictions with state governors after Easter.

France has decided to extend the national lockdown aimed at containing the virus.The policy, that took effect on March 17 and has already been extended once, will now go beyond April 15. French President Emmanuel Macron will address the nation regarding the new situation on Monday evening,

U.K. Prime Minister Boris Johnson is still in intensive care but is responding to treatment and his condition is improving, a spokesperson said.

Eurozone finance ministers will continue their discussions over how to finance the currency union's crisis response, amid an unresolved argument over the joint issuance of debt.

Asia/Pacific:

South Korea’s central bank did not deviate from analyst expectations prepared by Investing.com as it announced a benchmark interest rate of 0.75%.

Bank of Korea governor Ju-Yeol Lee added that the country was unlikely to grow by more than 1% this year, “considerably below” its earlier forecast of 2.1%.

The country also reported a new low of 39 new cases on Thursday, continuing a week-long streak of around or less than 50 new cases daily.

Hong Kong announced that its Executive Council approved a HK$137.5 million ($17.737 million) stimulus package on Wednesday.

It is part of a six-month, HK$80 billion wage scheme for the special administrative region’s private sector to save business and jobs.

New Zealand imposed 14-day quarantine on everyone entering the country starting at midnight on Thursday. The quarantine also applies to New Zealanders.