As Trump downplayed the virus publicly, memo based on private briefings sparked stock sell-offs: NYT

A memo based on information from senior White House officials in early 2020 conveyed to investors that the coronavirus pandemic was likely to be far more dire than President Trump’s public predictions, leading to stock sell-offs, The New York Times reported.

On Feb. 24, the same day the president tweeted the virus was “very much under control,” White House economic staff met with board members of the conservative Hoover Institution, many of them GOP donors, and said the White House could not yet predict the virus’s effect on the economy, the Times reported.

The following day, White House economic adviser Larry Kudlow also briefed board members, telling them the virus was “contained in the U.S. to date, but now we just don’t know.” The same day, he had said on CNBC that the government’s control of the virus was “pretty close to airtight,” according to the Times.

Following the meetings, hedge fund consultant William Callanan wrote a memo noting that nearly every economic adviser had brought up the virus “as a point of concern, totally unprovoked.”

As the document spread among investors, one said that their takeaway was “short everything.” 

In a separate Feb. 23 memo, White House trade adviser Peter Navarro warned the virus could kill up to 2 million Americans and that the U.S. was not prepared for a pandemic.

By Feb. 26, U.S. markets had fallen nearly 300 points from the previous week.

Trump told journalist Bob Woodward in February that the virus was considerably more deadly than the flu and that it was airborne and in later interviews said he was deliberately downplaying the threat of the virus to avoid causing panic.

Several financial transactions in early February by Sen. Richard Burr (R-N.C.) are currently under investigation. Burr made the stock sales shortly after a government briefing about the threat of the virus, but he has denied any wrongdoing. However, legal experts told the Times that the sell-offs prompted by the Callanan memo did not appear to have violated securities laws.

A White House spokesperson called the report a “complete fabrication” in a statement to The Hill.