In a rare moment Sunday afternoon, the Federal Reserve lowered interest rates and President Trump huddled with the CEOs of public firms, urging them to ensure their supply chains can meet consumer needs amid an unfolding pandemic.
“Relax. We’re doing great. This will pass,” Trump said in a coronavirus press briefing Sunday afternoon. He said he’d spoken to chief executives from Whole Foods, Walmart, Target, Costco and others, confirming “they are working 24 hours to keep stores stocked.”
“You don’t have to buy so much. Take it easy,” Trump said, recounting a comment from Walmart CEO Doug McMillan, who noted that consumers have been buying more than they do during the holidays.
“They’ve asked me to tell you ‘Could you buy a little less, please?’ I never thought I would hear that from a retailer,” Trump said, adding that there will be pent-up demand, and potentially an economic boom down the road but “we have to get through this crisis” first.
Trump began the briefing by expressing support for the Fed’s move to lower rates to between zero percent and 0.25 percent from 1 percent to 1.25 percent, the most recent adjustment. The Federal Reserve will also purchase $500 billion of treasury securities and $200 billion in mortgage-backed securities, the president said.
“I’m very happy. People in the market should be thrilled,” Trump said, noting that the rate cut puts the U.S. on par with rates overseas and makes the nation “very strong, financially.”
Rate cuts are designed to make borrowing easier for Americans. Consumers might not be home shopping at the moment, but those with mortgages might consider refinancing, which could augment their discretionary spend and spur an economic rebound. And a rate cut would also make it easier for cash-strapped businesses to obtain critical loans that help them stay afloat until the economy recovers.
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While speculation suggests the country might be at the tipping point for a recession, the economy must experience declining gross domestic product for two successive quarters before economist can officially declare that the U.S. has entered recessionary territory.
Following the news of the Fed rate cut, stock futures on Sunday dropped and were off by 1,000 points, suggesting another down day on Wall Street when the equity markets open Monday morning for trading.
Trump reiterated that his administration is “using the full power of the federal government” to defeat against the coronavirus.
The U.S is dealing with more than 2,900 cases in 49 states across the country, according to Vice President Mike Pence, who emphasized that “there is no higher priority than the health and safety of the American people.”
“The risk of serious illness remains low” for most Americans, Pence said, noting those who have compromised immune systems or the “elderly with serious chronic, underlying conditions” remain at greater peril.
Pence also addressed consumer who have been panic buying and stockpiling food and supplies over the last two weeks, and in particular this past weekend following Trump’s declaration of a national state of emergency on Friday.
“America has the most efficient supply chain in the world and it’s working just fine,” Pence said, stressing that some stores may operate with limited hours in order to clean and sanitize their facilities.
Sunday’s briefing updated the state of coronavirus testing. On Friday, Trump announced a new public-private partnership in which CEOs in the private sector agreed to work with government to facilitate testing via drive-throughs at select Walmart parking lots, for example,
“The worst is yet ahead for us,” said Dr. Anthony Fauci, an immunologist and head of the National Institute of Allergy and Infectious Diseases, adding it is how “we respond to that challenge” that could impact the outbreak’s progression.
“This window we’re in will be very important to stay ahead of this curve,” Dr. Fauci said at the briefing.
The federal government plans to provide daily coronavirus updates.