White House Watch looks at the government’s ramped up efforts to fight the spread of coronavirus.
The mobilisation of federal government resources to fight the spread of the coronavirus appeared to take giant strides Tuesday and an increasingly focused President Trump extended an olive branch to New York’s governor and other Democrats although not to the point of quieting his tweets.
There were many actions either implemented during the day or in motion at both ends of Pennsylvania Avenue, as well as at the Federal Reserve. On the day’s agenda: Promises of $1,000 checks quickly sent direct to individuals and more to small businesses, a 90-day postponement of tax payments – means tested for individuals, Treasury-Fed moves to ease stubbornly persistent strains in the money markets, an inventory of spaces that can be turned into “Mash” hospitals and a plea to construction firms to donate their N95 masks to local hospitals.
At the state and local level, there were more of the rigorous restrictions on gatherings than imposed by Washington put in place in many areas. The San Francisco Bay area’s 7 million residents, for instance, faced a midnight shelter-in-place order to last at least the next three weeks.
Yet the overriding reality continued to be the dread of uncertainty about the rate of virus spread among Americans. The number tested is growing but is still minuscule compared to what is needed to know if medical care can cope with the number of infection clusters in two to four weeks.
Officials everywhere stressed only near universal home stays away from groups can moderate the coming peak of infection. Those employed by construction firms, pharmacies, restaurants, hardware stores, first responders and medical personnel were among those advised to stay on the job.
At another White House briefing at midday, Treasury Secretary Steven Mnuchin said, “The President has instructed me we have to do this now”, referring to checks in the mail.
“We’re looking at sending checks to Americans immediately…Americans needs cash now and the president wants to get cash now. And I mean now in the next two weeks,” he said. Later in the day that projection had slipped to late April.
Yet the overriding reality continued to be the dread of uncertainty about the rate of virus spread among Americans. The number tested, though growing, is still minuscule compared to what is needed to know if medical care can cope with the number of infection clusters in two to four weeks.
Officials everywhere stressed only if most Americans can stay home and away from groups can the coming peak of infection be moderated. Many social media posts were unsettling in their mockery of the need to stay out of bars on St Patrick’s Day and away from beaches.
Mnuchin met with House Speaker Nancy Pelosi then met with Republican senators at lunch. The second piece of virus response legislation was being given final Senate passage while the Hill emphasis had already switched to a much larger third measure extending paid sick leave to all wage earners and supporting crippled industries like airlines and aerospace. Gone was any thought of taking days off. Pelosi also talked to Fed Chair Jay Powell by telephone.
Senate Republican leader Mitch McConnell called for “significant and bold” measures.
“Business interruption money,” Mnuchin said after the afternoon meeting, will be going to owners of restaurants and bars and other businesses forced to close. Specifics will come later but the $1,000 checks would cost government about $250 billion. The grand total of all the government aid being talked about appeared to top $1 trillion, a couple hundred billion more than directed at the 2008 financial crisis. Mnuchin told lawmakers that with interest rates so low, it does not cost much to borrow that amount.
Mnuchin’s mention of the possibility stock exchange hours could be shortened drew a denial from the NYSE. Mnuchin’s main point was that it is a top priority to keep US markets in operation.
President Trump first talked by telephone with fast-food restaurant executives in the morning in which they pledged to keep food service going via drive-throughs and delivery. Later Trump met with executives from the stalled tourism industry, promising full support.
In New York, Mayor Bill de Blasio said he thinks the economic effect overall will be the worst episode since the Great Depression, not just the 2008 Great Recession.
US stocks kept ratcheting higher while the normally impervious municipal bond market was being ruffled. Perhaps most notable, the yield of the benchmark Treasury 10-year crossed to above 1% about 3:30 pm Eastern time as the DJIA climbed toward a 1,000 point gain. The VIX fear index had “improved” to 74.41 in late afternoon.
By the close, the Dow was up 1,048 or more than 5%, the S&P gained 6% or 143, and the Nasdaq did the best, up 6.3% or 140 points, an impressive rebound but making up less than half of Monday’s double-digit losses.
The Fed action, in conjunction with Treasury, reinstituted the 2008 Commercial Paper Funding Facility to finance up to $700 billion worth, as flows out of money market funds increased. Fed asset purchases across the Treasury curve continued and the New York Fed said its essentially open-ended twice-a-day repo operations will continue all week.
Big banks answered the Fed’s call to start using the discount window, pushing back against the stigma of using the short-term facility. The next Fed step, according to the Atlanta Fed’s Raphael Bostic, might be a new TALF, the financial crisis facility that provided emergency credit to consumers and businesses.
Overseas, the European Union closed its borders to non-EU travelers, delivering a hit to the euro. In the US, the Kentucky Derby was put off and the Ohio Democratic primary was stopped at the last minute. Florida’s went ahead with fewer volunteers than usual.
With armchair analysts watching Trump closely, the reviews of his performance at the Tuesday morning briefing seemed to be even better than Monday’s, when the gravitas was amped up, there was an acknowledgement that the virus spread was not under control and, in fact, could require severe mitigation efforts until July or August. Similarly, there were increasingly favourable comments about the Corona Task Force Leader vice president Mike Pence.
Trump thanked Democrats, praised what he said was increased bipartisanship and even said he is working closely with New York Governor Andrew Cuomo, who in his early press conference, changed his critical tone to one of praise for “perfectly sincere” White House efforts. But Trump said he would keep swatting back with tweets any Democratic attacks that were “not fair”.
There were some darker threads in the day’s developments, among which could be included Trump’s comments that he is considering an executive order recommended by his trade advisor Peter Navarro to restrict imports of medical supplies in favour of developing domestic sourcing. Long before the coronavirus arrived, Navarro had espoused replacing supply chains with China.
In China, there was an announcement that work permits are being canceled for reporters from premier US newspapers and websites, The New York Times, The Wall Street Journal and The Washington Post. Trump at one point said he “did not appreciate” how some China officials said the US was to blame for the virus and he repeated that its origins were in China.