WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Wednesday that unemployment would not spike to 20% if Congress follows President Donald Trump’s coronavirus rescue plan and pledged that American companies would have ample financial liquidity through the crisis.
Speaking to CNBC television, Mnuchin said the administration was shutting down parts of the economy to “destroy” the coronavirus.
On Tuesday, he told senators that U.S. unemployment could spike to 20% if no actions were taken to ease the crisis, a source familiar with the closed door meeting said.
He clarified those remarks on Wednesday, telling CNBC: “I didn’t in any way say, ‘I think we’re going to have that.’ If we follow the president’s plan we will not have it.”
Mnuchin also said that the Treasury would continue to take actions to ensure liquidity, after he approved Federal Reserve backstop facilities for the $1 trillion commercial paper market and for primary dealers.
“We saw issues in those markets,” Mnuchin said. “The Fed reacted quickly, we reacted quickly, and we’re going to continue to make sure we react quickly.”
This includes forthcoming capital injection into the Treasury’s Exchange Stabilization Fund. Treasury is investing $10 billion from the $93.7 billion fund into the Fed’s new commercial paper credit facility that will buy highly rated commercial paper.
He also said the Internal Revenue Service would soon announce a delay in the April 15 tax filing deadline.
Reporting by Doina Chiacu and David Lawder; Editing by Marguerita Choy