Business & Economy

On The Money: Trump says economy ‘may be’ sliding into recession | Dow suffers second-worst day in history | Coronavirus package hits roadblocks | Fed unleashes arsenal amid pandemic

Happy Monday and welcome back to On The Money, where we’ve never been more eager for Opening Day.  I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL– Trump: US economy ‘may be’ sliding into recession: President Trump on Monday said the U.S. economy could be slowing into a recession as businesses across the country shutter to slow the spread of the coronavirus pandemic.

“It may be,” Trump said during a Monday press conference, adding he was focused more on the virus than the economy. 

Trump acknowledged that the virus could continue to spread through August and hinder economic activity through the summer.

“I don’t, number one, determine recession,” Trump said. “I just say this: We have an invisible enemy. We have a problem that, a month ago, nobody ever thought about.”

But he expressed optimism that a pandemic-driven recession would be short-lived. 

“I think there’s a tremendous pent-up demand both in terms of the stock market and in terms of the economy,” Trump continued. “Once this goes away, once it goes through and we’re done with it, I think you’re going to see a tremendous surge.”

 

Why it matters: Trump is far from the first person to say the U.S. could be heading into a recession. Gary Cohn, who was Trump’s National Economic Council from 2017-18, said last week that the U.S. was already in a recession. And Kevin Hassett, who chaired the White House Council of Economic Advisers from Sept. 2017 until 2019, said April could be the worst month of job losses in U.S. history. 

But that Trump was willing to acknowledge the economic damage facing the U.S. and the steep human suffering it could inflict along the way showed how much more seriously he’s addressing the pandemic after facing criticism for repeatedly downplaying it.

 

Stocks take worst losses since 1987 crash as Dow plunges nearly 3,000 points: Stocks plummeted even further after a Monday morning plunge following Trump’s comments, with the Dow Jones Industrial Average closing roughly 3,000 points down, a 12.9 percent drop. The S&P 500 fell 11.9 percent, and the Nasdaq composite sunk 12.3 percent.

The Dow’s Monday loss was it’s steepest drop by points and its second-steepest drop by percentage in the index’s history. The Dow’s drop shattered records set on March 12, when the average sunk 2,352 points for a loss of 10 percent.

As the economy craters, Trump and lawmakers are under growing pressure to pass a massive economic rescue plan that would support workers and businesses facing financial peril due to the pandemic. We’ve got more on that ahead in the newsletter.

 

LEADING THE DAY

Coronavirus package hits roadblocks amid GOP opposition: The House-passed coronavirus package is quickly running into roadblocks, throwing into question the bill’s timeline for reaching President Trump’s desk.

The challenges facing the House bill are two fold: First, House Democratic leadership and the Trump administration had to iron out technical changes to the legislation. They had hoped to clear those in the House on Monday, but as of 7 p.m. were still waiting.

The Hill’s Jordain Carney explains the impasse here.

As the Senate struggles to clear the second House-passed bill to bolster the government’s coronavirus response, senators are already piecing together ideas for a third, more ambitious package.

While Congress faces its own hurdles, the Federal Reserve is moving swiftly to unload a flood of stimulus into the economy.

 

Fed unleashes arsenal amid coronavirus pandemic: The Federal Reserve has nearly unloaded its available arsenal of weapons to avert a recession as the coronavirus pandemic unleashes chaos on the global economy.

The central bank’s emergency action could help the financial sector weather the unprecedented shutdown of crucial industries and support the economy’s rebound when the pandemic subsides.

Even so, the escalating closures of restaurants, bars, schools, and retail stores across the country may cause a surge in unemployment and a nosedive in consumer spending that the Fed may have little power to fight. I explain why here.

 

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