The Secretary of the Treasury and the President of the Federal Reserve differ in the recovery time.
Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome H. Powell offered different views on how quickly the US economy will recover in deposition before Congress on Tuesday.
They also took different approaches to wearing masks, which Representative Maxine Waters, chairman of the Chamber’s Financial Services Committee, said was needed at the hearing.
Mnuchin removed his mask while testifying. Powell kept his mask in place.
The Treasury Secretary also offered a more optimistic view of the economic trajectory than Powell, saying he expects a recovery in the second half of the year.
“We are in a strong recovery position because the Trump administration worked with Congress on a bipartisan basis to pass legislation and provide liquidity to workers and markets in record time” Mnuchin told members of the Chamber’s Financial Services Committee.
Powell said the economy was recovering more quickly than expected, but big risks continued as the virus persisted, overwhelming economic activity.
A second wave of the virus, Powell said, “could force people to withdraw” and “undermine public confidence, which is what we need to get back to many types of economic activities that involve crowds”.
“A full recovery is unlikely until people are sure that it is safe to engage in a wide range of activities,” said Powell, adding that “the way forward will also depend on political actions taken at all levels of government.” to provide relief and support recovery for as long as necessary. “
Their testimony was made when dr. Anthony S. Fauci, the country’s leading infectious disease specialist, warned lawmakers at a separate congressional hearing on Tuesday that the number of new infections in the United States could more than double to 100,000 a day if the country failed. contain the increase that is occurring in many states.
“We are now having more than 40,000 new cases a day,” said Fauci. “I wouldn’t be surprised if we reach 100,000 a day if it doesn’t. That’s why I’m very concerned. – Alan Rappeport
Mnuchin says he will not provide additional relief information to inspectors general.
Treasury Secretary Steven Mnuchin defended his record of transparency in managing the government’s $ 2.2 trillion bailout during a congressional hearing on Tuesday, but said he would not commit to providing additional information to a panel. inspectors general who accused him of preventing his requests.
Earlier this month, Michael E. Horowitz, acting chairman of the new Pandemic Responsibility Committee, and Robert A. Westbrooks, the committee’s executive director, warned in a letter that the Treasury lawyers’ interpretation would present issues of transparency and potentially significant supervision. “
Because of this determination, approximately $ 1 trillion of stimulus funds are protected from the committee’s oversight efforts.
Congresswoman Carolyn Maloney, a Democrat from New York, lobbied Mnuchin in her interpretation of the law and said that Congress intended the new committee to have access to information about how these funds are being implemented. The funds include money for tribal governments already involved in a series of lawsuits, aid to states, nearly $ 500 billion for companies, funds for aviation companies and the Check Protection Program.
Mnuchin argued that Maloney’s interpretation is different from that of legislators in the Senate and that there are several layers of oversight that he is trying to accommodate. He said he would ask the inspector general to work with the committee to address his concerns.
“We have complete transparency,” said Mnuchin.
European aerospace giant Airbus will cut 15,000 jobs.
The coronavirus pandemic continued to wreak havoc on global aviation when aerospace giant Airbus announced on Tuesday that it would cut 15,000 jobs across the global workforce, the biggest reduction in the company’s history.
Citing a 40% drop in commercial commercial aircraft activity and an “unprecedented crisis” faced by the airline industry, the company said it would cut about 10% of its 135,000 employees worldwide, with layoffs hitting factories in France, Germany , Spain and Great Britain.
Airbus chief executive Guillaume Faury had been preparing employees for difficult times in a series of recent memos, warning that it would be necessary to adapt to a “lasting decline” in aircraft demand. The company said it does not expect air travel to return to pre-pandemic levels before 2023, as soon as possible and potentially not until 2025. – Liz Alderman
The CDC director criticizes American Airlines for booking flights entirely.
The director of the Centers for Disease Control and Prevention on Tuesday expressed “substantial disappointment” at American Airlines’ decision to begin booking its flights according to its capacity.
“I can say that this is currently under critical review by us at the CDC,” said director Robert Redfield, in a Senate hearing, in response to a question from Senator Bernie Sanders of Vermont. “We don’t think it’s the right message, as you pointed out.”
It was not immediately clear what this review would entail and whether it included other airlines with similar policies. It was also unclear what the CDC could do in response and whether it had the power to compel airlines to leave some seats empty.
Dr. Redfield’s comments come amid a wave of coronavirus cases in states like Arizona, California, Florida and Texas, which have allowed more companies to reopen and relax meeting restrictions. Some of these states have paused or reversed their reopening plans in the past few days.
American said its decision would not put passengers at greater risk. “We are unwavering in our commitment to the safety and well-being of our customers and team members,” said Ross Feinstein, an American spokesman, in a statement. “We have several layers of protection for those who fly with us, including necessary facial coverings, improved cleaning procedures and a Covid-19 pre-flight symptom checklist.”
American limited flights to about 85% capacity, enough to leave half the seats half empty, but said last week that it would allow customers to buy all available seats on their flights starting on Wednesday.
Other airlines have taken a similar approach. United Airlines has never limited the number of passengers on its flights. United and American said they will notify customers when they are on crowded flights and switch to a less crowded flight.
In comparison, Southwest Airlines and Delta Air Lines said they will continue to limit the number of passengers on their flights until September. The Southwest, which does not allocate seats, is limiting flights to a level that allows each seat in the middle to remain empty, while allowing passengers to sit wherever they want. Delta limits main cabins to 60% and first class cabins to 50%, in addition to blocking intermediate seats. – Niraj Chokshi
Markets are failing to understand the threats to global growth.
The markets have become very accommodating as the risks of the coronavirus pandemic threaten global prosperity, Bank for International Settlements, which supports the world’s central banks, warned in its annual report.
In a nod to the recent disconnect between the financial markets and the economy, the group said that high share prices and the lower corporate debt premium suggest a departure from the reality of economic weakness.
“The financial markets may have become very accommodating – since we are still at an early stage of the crisis and its aftermath,” said Agustín Carstens, group director. General manager, he warned in a speech linked to the launch. He stressed that the path of the virus and its effects on companies still pose risks.
“It is important to note that the shock to solvency must still be felt completely,” said Carstens, warning that banks, which have lent loans to businesses and consumers, will be at risk when companies fail, taking workers with them. This situation, the group warned, could be “triggered by the effects of the cliff as initial fiscal support runs out and payment arrears expire.”
Central banks reacted quickly as companies and individuals struggled to sell assets and raise money, and the real world crisis began to infect financial markets – making it difficult for companies to issue debt and even trade US Treasury bonds, which generally they are highly liquid. Monetary policymakers bought large sums of bonds and entered new markets as lenders of last resort, with the intention of preventing a total collapse.
Investors calmed down and started buying stocks and debt again, feeling confident that the Federal Reserve and its global counterparts were ready to provide a pullback. Global stock indexes rose and companies issued debt at a breakneck pace.
But now they may be overreacting, warned the Bank for International Settlements and its leaders. – Jeanna Smialek
The Payment Protection Program is ending with money to spare.
After a stumbling start three months ago, the US government’s central aid program for small businesses is running out of money.
The wage protection program is scheduled to end on Tuesday, after granting $ 520 billion in loans to preserve workers’ jobs during the pandemic. But as new outbreaks emerge across the country and force many states to rethink their plans to reopen business, the program is ending with more than $ 130 billion still in its coffers.
“The fact that you have made it this far in the small business sector is a great achievement, and it is worth recognizing and celebrating these things,” said John Lettieri, executive director of Economic …