Treasury Secretary Mnuchin predicted that the current market sell-off will be a great buying opportunity for savvy investors because he doesn’t expect the seemingly endless daily stock plunges to continue.
“I look back at people who bought stocks after the crash in 1987, people who bought stocks after the financial crisis. For long-term investors, this will be a great investment opportunity,” he told CNBC.
“This is a short-term issue. It may be a couple of months but we’re going to get through this and the economy will be stronger than ever,” he said.
Mnuchin also said he expected the U.S. economic hit from the coronavirus outbreak to be short-term, and that the Trump administration was keeping its options open for any other future steps that may be needed, according to Reuters.
Mnuchin told CNBC the U.S. Treasury and the Federal Reserve were working to keep markets open and to shore up liquidity, helping banks as needed and seeking a significant increase for small business lending.
He also said negotiations with Democrats in the U.S. House of Representatives over an economic relief package were also going well as lawmakers seek to reach an agreement with the Trump administration on a new bill to help aid those financially hit by the outbreak.
"We're going to look at every tool in the toolbox," he said in an interview.
Mnuchin added that it was unclear how long the economic fallout would last as the virus' spread was still a fluid situation, but that he expected a strong economic rebound by year's end and urged investors to focus on the long-term.
"The medical experts can't give us a definitive period of time, whether this is one month or two months or three months, but we're gonna get through this," he said. "By the end of the year .. I think you can expect we're going to have a big rebound in economic activity."
One option not under consideration, he said: tariff relief for China.
"General tariff relief for China is not on the table," he told reporters later at the White House.
U.S. stock markets opened sharply higher on Friday after their worst daily selloff in more than three decades as investors hoped more fiscal easing would head off a global recession.
After the worst daily selloff in more than three decades on Wall Street, airlines, cruise liners and energy stocks were set to recover ground on optimism that U.S. Democrats and Republicans could announce a stimulus package soon, Reuters said.
Policy easing by central banks in Asia lifted equities and bond yields in early trading on Friday, sending shares of major U.S. banks including Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co up between 7.5% and 11%.
"What we're headed for is a market that should begin to settle down (with) investors now expecting the government to get the economic plan in place and get it into law," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
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