US expands support for financial markets, plans “big” stimulus

Washington, Mar 17 (efe-epa).- The Federal Reserve and the Treasury Department announced new steps Tuesday to shore up financial markets, while the Trump administration signaled its desire to see every worker in the United States receive a federal check amid the coronavirus-induced economic slowdown.

President Donald Trump’s team planned to submit a “very significant economic stimulus plan” to Congressional Republicans later Tuesday, Treasury Secretary Steve Mnuchin said the White house during a press briefing by the coronavirus task force.

“We’re looking at sending checks to Americans immediately,” he said. “This is no fault to American workers. For medical reasons, we are shutting down parts of the country.”

The US has more than 5,010 confirmed cases of the novel coronavirus, or COVID-19, and at least 87 fatalities blamed on the disease.

Though media accounts put the size of what Trump described at the same news briefing as a “bold” package at around $850 billion, Mnuchin declined to offer a specific figure, but said it would include relief for small business and support for airlines, hoteliers and other sectors hit hard by travel restrictions.

“You can think of this as something like business interruption payments,” Mnuchin said.

“We want to go big, go solid. We don’t want airlines going out of business or people losing their jobs and not having money to live,” Trump said a day after acknowledging that the various closures, shutdowns and other social-distancing measures could lead to a recession.

The Treasury secretary said that the government is committed to keeping financial markets open.

“We may get to a point where we shorten the hours if that’s something they need to do. But Americans should know we are going to do everything to make sure that they have access to the money in their banks, to the money in their 401(k)s and to money in stocks,” Mnuchin said.

Responding to calls from lawmakers, Mnuchin said that individuals will have the option to delay up to $1 million in tax payments without interest or penalties for 90 days.

Prior to the White House press conference, the Federal Reserve said that Mnuchin approved a plan allowing the central bank to provide $10 billion to backstop a category of lending known as commercial paper, which is a vital source of finance to certain sectors.

The step “will support families, businesses and jobs across the economy,” according to the Fed.

Also Tuesday, the Federal Reserve Bank of New York said it would hold an additional overnight repurchase agreement (repo) operation for same-day settlement in the amount of $500 billion.

“This action is taken to ensure that the supply of reserves remains ample and to support the smooth functioning of short-term US dollar funding markets,” the New York Fed said. EFE afs/dr