US stocks are closing, all three indices recorded their worst performance since March 16 – worst performance the stock’s pandemic is concerned about how it will affect the economy.
US crude oil prices fell 8.2% to $ 36.34 a barrel.
An increasing number of coronavirus cases in the United States have annoying Wall Street. A second wave of infections can force many businesses to shut down again immediately after reopening.
Treasury Secretary Steven Mnuchin said that despite the increasing number of cases, the US economy will not be closed again.
CNBC said, “We cannot close the economy again. I think we have learned that if you close the economy, you will create more damage, not only economic damage, but other areas.” in an interview.
Mnuchin said that next month more than a trillion dollars will be pumped into the economy.
Powell admitted that the May job report, which showed that 2.5 million jobs were added to the economy, was a pleasant surprise, but stated that millions of Americans would not return to their jobs and remain unemployed for years.
The Fed predicts that the unemployment rate will drop from 13.3% in May to 9.3% by the end of the year. Before the epidemic, the unemployment rate in February was close to 3.5%, the lowest level in 50 years.
Gross domestic product – the country’s largest measure of the economy – is expected to drop 6.5% before recovering this year.
The central bank is expected to keep its foot on the warning pedal for the foreseeable future. According to the point plan that shows the monetary policy expectations of the committee members, the central bank does not expect to raise interest rates this year or in 2021. Even in 2022, only two policy makers are waiting for the hike.
“We do not even think about raising rates – we don’t even think about raising rates,” he told reporters at a press conference.
Generally, low interest rates are good for stocks because it becomes cheaper for companies to borrow money. However, currently low rates mean that the economy will not stand up for a while.
President Donald Trump said in a tweet that the Fed was often wrong and added, “A very good Third Quarter, a wonderful Fourth Quarter and one of our best years in 2021”.
As states across the country reopen their economies, people have to live alongside the virus. A closely monitored coronavirus model from the University of Washington Health Metrics and Evaluation Institute was updated on Wednesday. By October 1, approximately 170,000 coronavirus deaths are predicted in the U.S.
IHME Director “If the US cannot control growth in September, we may face trends that worsen in October, November and the following months,” said Christopher Murray.
According to Johns Hopkins University, the number of global cases continues to increase and approximately 7.4 million confirmed infections have been reported. After the USA, there are mostly Brazil, Russia, England and India cases. More than 415,000 people died in the world.
Many investors were betting on a quick recovery for the world’s largest economy.
On Thursday, S&P was again negative for the year and was below the Nasdaq key threshold.
But the growing number of coronavirus cases in the United States and the dire economic projections from experts, including the US central bank, point to ongoing pain for companies and workers. The gloomy look may be getting harder to ignore.
Stephen Innes, head of AxiCorp’s global market strategy, said on Thursday that markets are having trouble digesting the headlines that show new virus outbreaks in the U.S. “A secondary outbreak is nothing to sneeze,” he said.
Faith Karimi, Arman Azad, Joe Sutton, Betsy Klein and Paul La Monica contributed to the reports.
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