Larry Kudlow, President Donald Trump’s chief economic advisor, told CNBC on Friday that he doesn’t want to “panic on policy measures” designed to combat the new coronavirus and said that U.S. growth remains strong.
“We would prefer a targeted approach, a rather micro approach,” Kudlow said. “Let’s think about individuals who might lose paychecks because they have to stay home if they get the virus. Let’s think about small businesses that might get hurt by this.”
“I just don’t want to panic. I don’t want to panic on the economy, which looks sound. I don’t want to panic on the virus, which frankly, most Americans are not at risk. And I don’t want to panic on policy measures. Let’s try to be calm and not overreact,” he added.
Kudlow explained that the White House would rather take a more specific, tailored response to the virus and hold off on broad-stroke policies that could upend local economies such as quarantines.
“Can we possibly do this fact by fact, day by day? Because we don’t know what the magnitude of the economy might be in terms of a slowdown,” Kudlow added on Friday. “We don’t actually know what the magnitude of the virus is going to be. Although, frankly, so far it looks relatively contained.”
Bonds, stocks swoon
The president last week in response to the spread of the new coronavirus around the world authorized the expansion of travel restrictions against Iran and the recommendation that Americans refrain from visiting regions of Italy and South Korea impacted by the disease.
Those restrictions and advisories followed the White House’s move in January to deny entry to any foreign nationals who have traveled in China, where COVID-19 began. The latest coronavirus figures from Johns Hopkins University show more than 100,000 cases of the virus worldwide and at least 3,300 deaths.
COVID-19 and fears it could hamstring the global economy have sparked a swoon in U.S. equities and bond yields. The benchmark 10-year Treasury yield sank to a new all-time low on Friday of 0.676% and the Dow Jones Industrial Average tanked more than 2.5%.
The Dow, S&P 500 and Nasdaq Composite on Thursday all sank more than 3% and remain firmly in corrections, each down more than 10% from all-time highs.
The market fears may have persuaded the U.S. Federal Reserve to issue its first emergency, 50-basis-point cut since the financial crisis earlier this week. U.S. lawmakers also approved roughly $8 billion in emergency spending to combat the disease.
Kudlow, a former CNBC anchor, said he would be a buyer of the stock market on this dip.
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