Treasury Secretary Steven Mnuchin said the Securities and Exchange Commission would not need to shut down trading instruments in a market free-fall scenario caused by the novel coronavirus.
“The markets are working properly and we have proper circuit breakers in place,” Mnuchin said to reporters on Tuesday, backing procedures already in place to temporarily shutter the market if stocks drop heavily,
Mnuchin was visiting Capitol Hill to testify before the House Ways and Means Committee about President Trump’s 2021 budget proposal.
Both the New York Stock Exchange and the Nasdaq have rules in place to halt trading in the event of a catastrophic event such as the stock market collapse on Oct. 19, 1987, also known as “Black Monday.”
Mnuchin’s comment comes as the Dow Jones Industrial Average struggles to regain its footing after losing more than 10% in the last week after people tested positive for the coronavirus in the United States. The Federal Reserve cut interest rates on Tuesday morning, hoping to jump-start the troubled markets, but the initial positive reaction turned negative after only a couple hours.
Six people in Washington state have died from the mystery illness, which has infected more than 80,000 people globally and killed more than 2,800.
Mnuchin told lawmakers that the Trump administration is keeping tabs on global risk to supply chains, trading, and the economy as the COVID-19 virus spreads. He said G-7 finance ministers and central bankers were ready to “do everything possible to limit the spread of the virus and limit the harm that it causes” before telling reporters that his office is working with banks to ease regulations.
