According to interviews given over the last couple of days, Steven Mnuchin, the Treasury Secretary, has stated that the government is ‘very seriously considering’ another stimulus bill as the coronavirus pandemic continues to disrupt the US economy. Although the details were vague, Mnuchin did reveal that any new round of stimulus would be much more targeted at businesses that have been impacted. This new relief comes after the USD2.2tn Coronavirus Aid, Relief and Economic Security (CARES) Act, which Mnuchin believes that there was ‘no question that money is having a major impact on the economy’. The initial CARES Act passed in March allowed qualifying American adults to receive a one-off payment of USD1,200, plus receiving an additional USD500 for every dependent under the age of 17.
Additionally, Mnuchin also spoke about US-China relations stating that he believes there would be a ‘decoupling’ of the Chinese and US economies if companies across the pond were not allowed to compete on a level playing field within China’s economy. He states that if the US ‘can compete with China on a fair and level playing field, it is a great opportunity for U.S. businesses and U.S. workers, as China has a large, growing middle class’ however warned ‘But if we can’t participate and compete on a fair basis, then you are going to see a decoupling going forward’. He did add that he has ‘every expectation’ China will honour the terms of the Phase 1 trade agreement.
One person who is bullish about the US economy is James Bullard, the St. Louis Fed leader. He believes there will be a strong rebound in the second half of 2020. Bullard, who doesn't currently have a vote on the Federal Reserve's rate-setting Federal Open Market Committee, thinks as bad as the numbers were in the second quarter, the economy was and still is in ‘better shape than one might expect’. Bullard stated: ‘We've got a lot of very aggressive monetary policy and fiscal policy in place to respond to this crisis’, adding, ‘So I'm hopeful that we can get a pretty robust recovery in the second half of the year and that inflation will actually come up to our 2% target’.