Wall Street wants an interest rate cut in March. The economy is in trouble. Several big-league economists think the spread of the coronavirus could produce a global recession. China’s economic growth could drop by more than 4.5% at the end of March, and the global economy could suffer a 2.0% drop thanks to the coronavirus. The U.S. economy will take a hit too. The new GDP growth projection is 1.7% at the end of March.
Economists know interest rate cuts stimulate the economy during the economic glitches that result from the trade wars and other domestic and foreign policy blunders. But economists don’t know if a rate cut will pull the U.S. out of the arms of a recession, caused by the coronavirus, but they say it’s worth a try.
The stock market took a $3 trillion hit in three days thanks to investor panic over the coronavirus outbreak. The coronavirus will continue to create health and travel issues. And business and factory closings will continue to erode economic growth as it spreads across the United States.
Mr. Trump told the press his administration has what it takes to stop the spread of the coronavirus. But Mr. Trump left important positions vacant in his administration that were in place to deal with a health crisis, and those vacancies hinder the effectiveness of the administration’s reply to the spread of the virus. Plus, putting Mike Pence in charge of the virus takedown indicates the president doesn’t take the virus threat seriously, according to the New York Times.
Chuck Schumer wants Congress to approve $8.5 billion to fight the coronavirus. Trump only asked for $2.5 billion which way below the amount of money Congress approved to fight other health threats.
The Chinese government plans to inject billions into its economy now that factories and businesses face bankruptcy due to the coronavirus. Economists think China’s economy will bounce back, but it might take months for factories and businesses to function profitably.
Tech giant Huawei plans to continue pushing its 5G infrastructure around the world despite the coronavirus outbreak. More than 40 countries signed a 5G contract with Huawei, and the company thinks France will be its next 5G customer. In order to sweeten the 5G pot, Huawei wants to build a 5G factory in France. Macron didn’t approve that offer, but according to the French press, Mr. Macron might take that offer since the factory will service the 5G needs of all members of the European Union.