Crisis. He is in charge of 2. 3 trillion. Relief is on the way for millions of americans meanwhile and has a 2 trilliondollar coronavirus package is expected to help Small Businesses and individuals as soon as next week. It includes funding for public health, Small Businesses, Small Business loans, Unemployment Benefits and direct payment to americans. Steven mnunchin tells me that the new bank Lending Program will be ready by next friday. Chairman powell and i are speaking multiple times a day, every day. Even before this legislation was passed, the fed requested use of 133, those are there emergency powers, the way this works is the fed makes a request to me as treasury secretary, i have to approve it, ive approved all the requests so far, weve announced five of these transactions using existing money that we had before the legislation was passed, and the mechanism works in some of these where the fed is doing certain transactions, vacant credit support from the treasury and money that we put up with the Exchange Stabilization fund. The fed and treasury didnt wait for congress to act, weve already started using this, we didnt have enough money, congress allocated more money and i can tell you we are moving at lightning speed. Lightning speed and enormous numbers. You have to believe this is going to move the needle. Do you think we could avoid a recession with all of the stimulus . Marie, i made this, yesterday and i just want to clarify it because the number one issue is, its not what the economic numbers are right now, the number one issue is the hardship to the American People who are losing their jobs. We have multiple approaches to this to help the American Workers because this is not their fault. We have a Small Business Lending Program for retention loans that should help 50 of the u. S. Payroll and that it provides eight weeks for people to work with forgivable loans. Im on record to say we will have a new program up by next friday where banks can lend. That would be a historic achievement that is just a incredibly aggressive. This is a brandnew program, working with the sba, we are doing everything we can because americans need that money now. We cant wait to take four or six months like we normally do. We also have the economic income payments, during the obama years this took months and months for the treasury and irs to get out, were committed that they will get these direct deposit in three weeks. American workers cant wait on the last part is the Unemployment Insurance. That will go through the states. I know the states are a bit overwhelmed in their Unemployment Insurance but they will work as hard as they have and i know lindsey and others have commented on this, the reason why we sent one number is we had to create a simple system and we didnt think it would be fair to send certain states 400 and other 800. On a bipartisan basis, the Banking Committee picks 600 acrosstheboard. So when you said yesterday these numbers dont matter, in response to the numbers on jobless claims you say this is just a spike in temporary and things will normalize by year end. What i should have said is these numbers matter because it indicates people are losing their jobs and now we have government programs, we will either get those people back to work or we will get those people money, but whether the number is higher or lower in the shortterm, and Economic Statistics at the moment are not relevant. We are in an unprecedented situation where the government shut down major parts of the economy. Whether its unemployment claims or other numbers, this doesnt inflect the normal economy. This reflects government action. Tell me about the stakes and airlines. The president talked a little bit about this with sean hannity, but what do you want to see in terms of the government taking stakes in the airlines here. Do you want to get equity, warrants, how will that work in terms of billions of dollars in direct grants allocated to the Airline Industry in this package. Maria ive been very clear this is not an airline bailout. The taxpayers need to be compensated for relief theyre giving to airlines. What. The airlines, in our view have natura National Security interest. We need to make sure when we reopen the economy we have domestic and International Air travel and, i think we have the right balance of being able to provide relief, by the way all the relief goes to workers so the airline can operate and are ready to reopen but taxpayers get compensated. Its probably one of the more comp located parts of this but i think we struck the right balance and again, let mak be clear, this is not an airline bailout, it is support to the airlines for National Security reasons that the taxpayers are going to be compensated for. Understood but you also have to believe that boeing and National Security. Theyve got a very important military part of the business putting the commercial jet business aside will there be a nec equity stake in boeing. Maria i can only comment on what they had said publicly which is that they have said they have no intention of using the program. That may change in the future so again, let me be clear these are things that the Companies Need to come and ask us for so again, right now boeing is saying they dont need it and let me also be clear, this is not about the 737 max. If we do something, yes, of course. The taxpayers will be fully compensated but i appreciate the fact that boeing thanks they can operate on their own, thats what we want them to do. The government is only there in case they can do that and again, no bailouts for boeing or anyone else. Maria tell me about the Small Business part of the secretary, because this is really the area that our viewers have been asking a lot about, when they will actually get help here. Small business, even as small as im talking about restaurants that feel like they might not make it out of this because they have to close and they remain closed with people on lockdown. Its a Great Program and i especially want to thank marco rubio, susan collins, mark warner and other people that really helped us on a bipartisan basis. Every Small Business, if you have 500 or less employees in Certain Industries can actually go higher than that you can get a loan that will cover eight weeks of your payroll plus overhead and as long as you hire those people your loan will be forgiven. This keeps 50 of American Workers at work, and we understand these are restaurants that are closed, retail shops closed and malls. This is not the fault of the American Public and we want to get all those people paid. Maria . My thanks to Steven Mnunchin. Dont go anywhere. My oneonone with Steven Reeder is next. Tada did you know Liberty Mutual customizes your Car Insurance so you only pay for what you need . Given my unique lifestyle, thatd be perfect let me grab a pen and some paper. Know what . Im gonna switch now. Just need my desk. My chair. And my phone. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Maria welcome back. Joining me now to talk about this financial crisis and this pandemic and how to best invest, rick reeder is here, chief Investment Officer of. [inaudible] he oversees 2. 3 trillion in fixed income assets. Its great to have you. Thanks for being here. Thank you for having me. Maria i want to get your reaction to my interview with treasury secretary mnunchin. He just said the number one issue is the hardship of the American People who are losing their jobs. That is why theyre throwing this extraordinary massive stimulus. Characterize what we are seeing. Weve never seen this kind of stimulus from the federal government to the Federal Reserve, global central banks, ever. Ever is right there are not enough descriptions to come up with to talk about the extreme set of events we are having. People compare this to the crisis of oh eight. This is the crisis of oh eight and oh one rolled into one another because after september 11 the uncertainty was tremendous. It came on so quickly and with the central banks, what theyve done and what the fiscal side has done has just thrown everything at it and frankly its really impressive. If it didnt happen the duress in the system would be significant. Cash problems around the world, supply chain breakages, but you have to give a tremendous amount of credit to whats happening from the fiscal side and the central banks. They are bridging the gap to help with the uncertainty. And you think it will work. When we spoke earlier we talked about all of this, and you said yes its unlikely to be resolved as quickly as it arrives, however, you think we actually could avoid a recession. Depends on, theres an economic definition of recession thats two consecutive quarters of negative growth. I think whats can happen is the economy will decline and is decline particularly across some industries that are shut down so you will have something thats not like how we would measure traditional recession which is this procession of building up in a slowdown in a pullback. This is just an extraordinary deep decline, but then i think you will see an acceleration on the backside of it thats real. The u. S. Economy was in really good shape going into this and i think will be in good shape coming out. There are some tail effects for sure, but i think europe will be trickier because theres no real catalyst for growth and japan is trickier, but i think the u. S. Economy is going to have a vibrant experience on the backside of this. It will be really deep on the downside and bounce back. Maria so a bounce back at the end of the year. What kind of gdp are you expecting at the end of the year in terms of all of this pentup demand. So the math around it is tricky because you could have numbers that are down 20 . Quarter or more, ive actually seen the more than that, and then rebound of 5 8 . Quarter on the backside and were even bigger than that. Theres no doubt you can see that sort of dynamic happening. Whats bizarre, we do a lot in credit markets and equity markets, some industries are just can be closed for a period of time and then we will see this explosive coming back in terms of revenue. Others are seeing the reverse of this. You look at some of the retailers, costco, walmart, pharmacies where youre seeing tremendous stock up and then you actually see it go the other way. You will see what is going to be a significant opening of the economy, its just a question of is it a month for now or four months from now. This is why the markets are so uncertain and so volatile. This is the craziest week ive ever been associated with and its all about interpreting how does the monetary transition into ambridge to what should be roughly back to normal. I dont think were ever going back to complete normal for the next few months but what is a normalized pace of economic activity. Maria is there a chance weve hit bottom already . Do you think the market, equity market has hit bottom. My guess is theyve hit bottom because it was such a profound decline and then youve seen this immense stimulus how it all has to get done and it all has to get implemented and then the monetary policies, listen, one thing im certain of, in volatility is finished because the fed has this bazooka out and is buying immense amounts. That volatility is down, mortgage volatility is down, equity volatility will still be high, my guess is weve seen the bottom but i wouldnt write off that were going to go down a bit further. What areas of business are going to get the most help. Lets take a short break. We do have negative rates in parts of the curve so we will get your take on that when we come right back. You wouldnt accept an incomplete job from anyone else. So why accept it from your allergy pills . Flonase relieves your worst symptoms which most pills dont. Get allinone allergy relief for 24 hours, with flonase. And platelet donations and asks all healthy donors to schedule an appointment to give. Now, with the corona virus outbreak, it is important to maintain a sufficient blood supply. Your Blood Donation is critical and can help save lives. Please schedule an appointment today. Download the blood donor app. Visit redcrossblood. Org or call 1 800 red cross today. You can make a difference. We find a way through it. Y, its about taking care of each other. Its the small parts that make a big difference. At chevy, we promise to do ours. Were offering chevy owners complimentary onstar crisis assist services and wifi data. If you need a new chevy, interestfree financing for 84 months with deferred payments for 120 days on many of our most popular models. You may even shop online and take delivery at home. Its just our way of doing our part. But family can only tell you sot much. About your history. I found some incredible records about samuel silberman. Passenger manifests, census information, even wwi draft registration cards. The records exist. Theyre there, theyre facts. That made it so real for me, it wasnt just a story anymore. Bring your Family History to life like never before. Get started for free at ancestry. Com hes been around the world, hes seen it all, its always what you think of, [crowd] surprise right there, all the time, with over 40 fully integrated applications, you wont be able to contain your excitement either. From just a dollar a day per employee, run your entire business with zoho one. The operating system for business. Maria were back with mr. Reeder of black rock. The treasury will get together with the Federal Reserve and have a leverage position where you can actually see the Federal Reserve backstopping up to 5 trillion in terms of what they are going to be able to buy. You said earlier we want to follow the fed, by mortgagebacked, by treasury, is that how youre allocating capital, and give us your sense of the stimulus package and what areas of business get the most help. So yes, following the fed is a strategy. The fed will win. There are very few things you can be certain of in these markets. I am certain the fed will win. Well get into the system treasuries, now you have to be careful about what industries you look at and how to think about that, but listen i also think you have to hold a fair amount of cash. I also think theres some equity people should put away. Hold higher level of cash, follow the fed in terms of where the treasury market is because bill keep pressing rates lower when you talk about the sort of firepower but then pick away at some of these equities, some of the Consumer Sectors which will come back to my vega makes a lot of sense. Then from the fiscal side, listen, the biggest impact is on healthcare, the amount of money that will go into healthcare is extraordinary. By the way not only will it be some discoveries around the virus but whenever you put this sort of money at healthcare and discovery in biotech which is an area i would put money into from an equity point of view, you find you make other discoveries and now we can dissect the human genome effectively through dna. That will create some real velocity. Thats powerful and will be significant. Longer term, as you get into Small Business, that will have a real impact. The money thats getting into keep businesses afloat and then move forward is going to be really significant. I think you will see that play through in the economy as you get into the second half of the year. I love it. I love everything youre saying. I think this is going to be a terrific recovery to look forward to. What you make of the government taking equity stakes in the airline . You just heard Steven Mnunchin talk about it, the president has talked about it getting these warrants, i think we could see a similar situation with boeing even though i spoke with the ceo earlier this week and hes really pushing back on this idea. You just heard Steven Mnunchin say look, well see where that goes. Would you invest in a company that has the government as one of its big shareholder. Is a great question. It depends on the valuations. You look at some of the airlines and how they think about that, the concept of financing airlines in the government. [inaudible] we happen to dilute the equity significantly. Then you have to look at it on a fully diluted basis, would you buy some of these equities Going Forward and they are starting to look pretty attractive. Its a hard industry today because you dont know what the recoveries going to look like so listen, i think in todays environment, you take small pieces of the airline, may be but that is so profound or potentially so profound that id rather go into the other places that you know. Let me turn to interest rates. You did see some of the three month bill actually showed negative rates, we are seeing some negative rates in the u. S. As low as they are, theres a lot of people who would say we dont want negative rates the way europe is, but weve got them in some corners, right. We have them where its cash , the demand for cash, your seeing bills, its an embodiment of people who just want to give something that is cash or cash like. Listen, we dont want negative interest rate. The fed, what theyre doing, its 100 right. They said were not gonna take rates to zero which theyve done, and then, in the funds rate and the front end of the curve, then we will keep buying assets. Thats the right way to do it. You put liquidity and dollars into the system and then you liquefy the system. You improve the credit markets, thats the right way to do it. We dont want negative interest rates. It didnt work in europe, doesnt work in japan and its so hard to come back from it. What the fed is doing is exactly right and we dont want negative interest rates. Maria its always a pleasure to speak with you. Thank you so much for your insight. Thank you. I appreciate it. Maria rick reeder from black rock. Dont go away. Tv sports announcer five seconds left. Oh ho yeah, thats my man there. Tv sports announcer time out. Lets go to a commercial. Nooooooo not another commercial when you bundle your home, auto and Life Insurance with allstate you could save 25 . In fact, the more you bundle the more you can save. Put the other game on if its important to you allstate can protect it. Home auto and Life Insurance you could save 25 . If its important to you allstate can protect it. What . Bundle and save with allstate. Click or call for a quote today. Maria welcome back. I well be back next weekend. Dont forget to join us. Be sure to watch every weekend at 9 00 p. M. Eastern right here. Ill see you sunday morning over on the fox news channel. Sunday morning futures is live 10 00 a. M. Eastern sunday. Ill speak with billionaire investor and South Carolina lindsay graham, as well as kevin mccarthy. The show is live over on fox news. Join us. Then right here, start smart every weekday. Two men from six until 9 00 a. M. Eastern with mornings with maria. Jim pack show next week. Set the tone with us every morning 60. Nine on foxbusiness. That will do it for us right here. Thanks so much f welcome to where we get about te most important things investors should be thinking about right now. The market up and down and what investors should watch for next week. Biotech scrambling to develop a coronavirus vac
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