Reuters
- The US has contained the coronavirus within its borders and avoided “economic tragedy,” White House economic adviser Larry Kudlow told CNBC on Tuesday.
- Alex Azar, the administration’s secretary of Health and Human Services, struck a more serious tone, telling Congress “we cannot hermetically seal off the United States to a virus, and we need to be realistic about that.”
- The CDC also deemed the virus “a serious public health threat” and warned that its continued spread in the US “might have societal and economic impact.”
- Visit the Business Insider homepage for more stories.
Investors need not fear the coronavirus escalating within the US, White House National Economic Council Director Larry Kudlow said on Tuesday. Other government officials aren’t so optimistic.
The top economic adviser took to CNBC to reassure those monitoring the sharp uptick in market volatility. US stocks tumbled for a second consecutive day on Tuesday amid new coronavirus deaths in Asia and Europe. Investors sought safe haven from the public market turmoil and rushed to government debt, pushing the yields for the 10-year and 30-year Treasury bonds to all-time lows.
Kudlow commented that markets will see “some stumbles,” but that the US wasn’t experiencing any “supply disruptions out there yet.”
“We have contained this. I won’t say [it’s] air-tight, but it’s pretty close to air-tight,” Kudlow told CNBC’s Kelly Evans. He called the coronavirus outbreak a “human tragedy” but said it won’t likely become an “economic tragedy.”
Kudlow’s comments come just as Health and Human Services Secretary Alex Azar struck a less positive tone while testifying to Congress. The White House official called coronavirus “an unprecedented, potentially severe health challenge globally” and rebuked any attempts to minimize the outbreak’s threat.
“We cannot hermetically seal off the United States to a virus, and we need to be realistic about that,” Azar said.
The Centers for Disease Control also warned Tuesday that the outbreak could worsen in the US. The institute deemed coronavirus – and the related COVID-19 disease – “a serious public health threat” and warned continued contagion “might have societal and economic impact.”
Public officials can’t predict whether the disease will continue spreading or fade away, and citizens should err on the side of caution, Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases, told The New York Times on Tuesday.
“It’s not so much of a question of if this will happen in this country any more but a question of when this will happen,” she said. “We are asking the American public to prepare for the expectation that this might be bad.”
Concerns of economic damage tied to the spreading virus have amplified calls for the Federal Reserve to issue new cuts to its benchmark interest rate. Such policy is typically used to boost spending and lift ailing economies, but some strategists
Kudlow told CNBC that he doesn’t anticipate such action from the central bank, and believes the Fed will stay its course until inflation reaches its 2% goal.
“I’m not hearing the Fed’s going to make any panic move,” Kudlow said. “Apart from the virus, I have said I wouldn’t mind seeing my friends at the Fed be a little bolder in their target rate and their balance sheet.”
The S&P 500 index slumped 2.7% as of 3 p.m. ET Tuesday, erasing the last of its year-to-date gains. The Dow Jones Industrial Average was down roughly 770 points, or 2.8%. Monday marked the worst single-day drop for US stocks since 2018.
Now read more markets coverage from Markets Insider and Business Insider:
Hot biotech Moderna spikes 22% as it ships the first potential coronavirus vaccine for human testing
