President Trump insisted the U.S. is not suffering through a financial crisis in an Oval Office address to the country about the coronavirus outbreak on Wednesday.
Trump, speaking after markets plunged once again on Tuesday, said the U.S. economy and financial system was strong enough to weather a potential economic slowdown driven by the coronavirus pandemic.
“This is not a financial crisis. This is just a temporary moment of time that we will overcome together as a nation,” Trump said.
More than 1,000 cases of COVID-19 have hit the U.S., and a series of events on Wednesday underscored the seriousness of the threat to the country.
The NCAA announced it would hold its annual basketball tournaments before empty arenas to prevent the spread of the virus, and the NBA suspended its season shortly after Trump’s address after a player tested positive for coronavirus.
Trump also said he was suspending flights from Europe for the next 30 days because of the virus, a decision likely to ripple throughout the global economy. The president said such travel restrictions would apply to “trade and cargo,” but the White House later clarified that goods from Europe would still be able to enter the country.
Trump’s speech comes amid growing fears that the COVID-19 pandemic could derail a sturdy U.S. economy and cause a painful slowdown. Financial markets have cratered as Trump and lawmakers struggle to find common ground on a plan to support Americans who may be unable to work or laid off during a downturn and businesses likely to suffer from dampened consumer spending
Trump said he will “soon be taking emergency action [to] provide financial relief … targeted for workers who are ill, quarantined, or caring for others due to coronavirus,” without specifying how he would do so.
The president also said he would instruct the Small Business Administration to extend low-interest loans to businesses in coronavirus hot spots to overcome steep declines in activity, and would ask Congress to approve a temporary payroll tax suspension that has fallen flat among lawmakers.
Trump’s Wednesday night proposals, which were floated throughout the week by the president and his advisers, did little to reassure traders clamoring for massive stimulus injection.
Dow Jones industrial average futures plunged after Trump’s address, projecting a loss of more than 1,000 points when markets open Thursday.
Trump also did not address a several issues that Democrats consider essential to any coronavirus aid plan, including provisions to expand unemployment insurance and ensure that low-income children don’t miss meals due to school closures. The House is set to vote on a bill with those measures and others, including federal paid sick leave, on Thursday in a bid to force the Senate to pass the legislation quickly.
Economists warn that the U.S. could slip into a recession if Congress does not provide stimulus targeted to stave off a cycle of layoffs and consumer panic driven by the virus. Even so, a downturn the scale of the Great Recession remains unlikely thanks to post-crisis regulations mandating stricter capital reserve levels and federal oversight.
Trump met with top U.S. bank CEOs and advocates Wednesday to discuss how the financial sector could help shore up businesses most threatened by a downturn. The bankers stressed that they stood ready to help customers navigate financial hardships while anchoring the U.S. economy.
“Our banks and financial institutions are fully capitalized and incredibly strong, our unemployment is at a historic low,” Trump said Wednesday night. “This vast economic prosperity gives us flexibility, reserves and resources to handle any threat that comes our way.”
Updated 10:21 p.m.