Rep. McCaul: Fundamentals of our economy still 'very strong'
Rep. Michael McCaul comments on the stock market selloff after the Federal Reserve slashed interest rates
“The fundamentals in our economy are still very strong" despite U.S. equity markets plunging again amid the coronavirus pandemic, Rep. Michael McCaul, R-Texas, said Monday on “America’s Newsroom."
“That's why we are going to get through this thing,” he added, acknowledging that the new coronavirus outbreak “is going to have an impact on the markets.”
“I think the markets, there is a lot of uncertainty, obviously they are responding very negatively,” the House Foreign Affairs Committee's ranking member said.
U.S. equity markets saw a dramatic drop before easing some of the losses on Monday following the Federal Reserve taking emergency action to combat the economic harm caused by the novel coronavirus outbreak. Trading was halted for 15 minutes shortly after the opening bell due to the S&P 500's decline of more than 7 percent.
McCaul said that he is worried about entertainment as well as the airline industry, which is “talking about possibly going into bankruptcy by May.”
He then went on to describe two “positive things that have come out recently that I hope will give the markets more reassurance.”
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McCaul noted that there are antivirals, “three of them now being tested in China on Chinese patients that have shown great promise, so we are getting a report in April, next month, about that.”
He also pointed out that “the first clinical trial vaccine is being tested today in Seattle, Washington. It will still take a year to finalize that, but that's actually some positive news.”
“We have to reassure the markets that this thing is not going to spiral out of control,” he continued, adding that that is why it is “so important” to pass the coronavirus relief bill.
The House overwhelmingly passed the emergency coronavirus package on Saturday morning after more than 20 phone calls between House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steve Mnuchin. It’s unclear what path the Senate may take with the coronavirus measure expected to be taken up this week.
McCaul explained that it’s important to pass the bill “because it will give certainty to the markets and it will provide testing that we desperately need throughout the United States.”
“I am not normally a fan of bailouts,” McCaul said, adding that he voted against the bank bailout of 2008.
“I will say we did pass $8 billion for research for treatments for the vaccine,” he said. “The last bill is for families first to make sure we get the screening, we get paid sick leave, things that every day Americans are worried about.”
He went on to say that he thinks there will be a third tranche that will come out which would deal with a payroll tax cut for middle and low-income families “so that they can keep more of what they earn and put it back in the economy.”
“Our fundamentals are strong and I think that is important to say,” he stressed. “This is a bit of a curveball coming outside from Wuhan, China.”
The novel coronavirus is believed to have originated in Wuhan, according to officials.
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“We got to get off the supply chain of China. It's not good for the United States,” McCaul noted on Monday, stressing that it is especially important as it pertains to medical supplies.
Fox Business’ Jonathan Garber and Fox News’ Chad Pergram contributed to this report.
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