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

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Via Reuters Finance

WASHINGTON (Reuters) – The Trump administration’s top economic officials said on Thursday they believe the U.S. economy could start to reopen for normal business in May, despite health 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

Comments from U.S. Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow signaled a renewed push for a quicker resumption of economic activity even as U.S. death rates from the virus continue to climb.

Asked on CNBC whether President Donald Trump could start to reopen businesses 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.”

Kudlow, speaking on Fox Business Network, said the economy should be able to reopen on a “rolling basis” over the next month or two.

“Our intent here was, is, to try to relieve people of the enormous difficult hardships they are suffering through no fault of their own,” Kudlow said.

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 to slow the virus’ spread through the month of May.

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“We need to have a plan, nationally, for reopening the economy,” Federal Reserve chair Jerome Powell said on 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, the government’s top infectious disease expert, 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 of death toll projections.

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. coronavirus death toll by 26% to 60,000.

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

More than 16,300 Americans 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. In March, Trump argued that this should come by Easter on Sunday, but backed off that target when coronavirus cases intensified in major cities, particularly New York.

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A paper here 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 maintained that longer had fewer deaths – and ultimately emerged from that health crisis 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 said on Thursday. “There is every reason to believe that the economic rebound, when it comes, can be robust.”

Reporting by David Lawder; Editing by Heather Timmons, Jonathan Oatis and Bill Berkrot


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