Treasury Secretary Steven Mnuchin told CNBC’s Jim Cramer on Monday that “there will be a huge amount of pent-up demand” for stocks when the threat of the coronavirus is contained.
“There will be a huge amount of pent-up demand when this is done. And it will be done,” Mnuchin said.
“Look for companies that have a ton of liquidity. An Apple will have customers,” he continued. “That’s just a given. The goal is not to bail out companies.”
Stocks dropped again on Monday despite the Federal Reserve cutting interest rates down to zero, causing trading to halt for 15 minutes. The Dow Jones Industrial Average dropped 1,760 points or 7.6% on Monday, the S&P 500 fell 7% and the Nasdaq Composite declined by 6.9%.
“The banking system can handle this after the Fed’s actions,” Mnuchin said. “Now it is a question of liquidity for those who need it... To keep entities from closing ... and help the working person. Our stimulus is designed to let small businesses keep people on payroll. ... We’ll always be thinking about what happens after we get through this.”
He added that the Fed was right to cut U.S. interest rates and introduce a $700 billion quantitative easing program.
“The Fed is ahead of the issues and I’m grateful; nobody has to pull money out of the banks,” Mnuchin said. “Liquidity for small businesses is chief priority. ... Restaurant and bar owners, for example — we’re trying to get money to them to tide them over.”