• After U.S. Congress and Fed's quick coronavirus response, next steps likely tougher for Washington

    9 Mar 2020 | Economic News



The U.S. Federal Reserve and Congress moved swiftly to confront the growing coronavirus threat this week, as the central bank propped up the economy and the House and Senate approved $8.3 billion for vaccine development and other steps to contain the virus.

Now comes the hard part.

With at least 100,000 people infected across the globe, the disease caused by the virus has disrupted manufacturing supply chains, emptied out business districts and shuttered schools. The scare has wiped out roughly $4 trillion in U.S. market value, and analysts say the risk of a global recession is increasing.

That risks undercutting one of President Donald Trump’s central arguments for re-election in November - the strength of the U.S. economy - and his administration is already signaling it may open the public checkbook again.

Those measures could carry a heftier price tag, and could prove more divisive than the initial package, which passed Congress with overwhelming bipartisan support.

This Congress has spent months on impeaching Trump, and outside of Washington Democrats are about twice as likely as Republicans to say the coronavirus poses an imminent threat, according to a Reuters/Ipsos poll conducted this week.

That will make it harder for the two sides to work together to contain the threat, said former Democratic Representative Dennis Cardoza, who was involved in negotiations in 2008 and 2009.

“There’s a lot of mistrust,” he said. “It’s going to be a difficult lift.”

Reference: Reuters

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