Treasury Secretary Steven Mnuchin said Tuesday that Wall Street and the White House are committed to keeping financial markets operating, even if it means reducing hours at some point.
The comments came amid a pledge to do whatever it takes in terms of financing or regulations to keep the U.S. economy operating. Markets soared on the comments, with the Dow industrials briefly gaining more than 1,000 points.
“Everybody wants to keep it open,” Mnuchin said at a news conference, responding to a question about stock market opeations. “We may get to a point where we shorten the hours if that’s something they need to do. But Americans should know we are going to do everything to make sure that they have access to the money in their banks, to the money in their 401(k)s and to money in stocks.”
Wall Street has seen whirlwind trading that has taken major averages like the Dow Jones Industrial Average and S&P 500 into bear market territory at the fastest pace in history. A bear market is defined as 20% lower from 52-week highs, and the current one has been measured from a historic peak stocks hit back in February.
However, market leaders themselves have bristled at suggestions to shut down trading in hopes that a break can tame some of the volatility. The top official at one exchange was not happy to hear about plans to limit hours.
“Shorter hours make no sense. Financial markets are critical to managing risk and ensuring the resilience of the U.S. and global economies,” CME Group Chairman and CEO Terry Duffy said in a statement. “Therefore, they must remain open, especially during this unprecedented crisis when news, information and events are changing at such a rapid pace. Markets are global, so shortening U.S. hours would not decrease volatility. Rather, it could actually increase as investors turn to other venues outside the U.S. when developments occur.”
Mnuchin’s remarks came along with a vow to provide whatever help the economy needs. Particular focus has been on aid to small businesses impacted by the coronavirus crisis. The administration and congressional leaders have been locked in negotiations that are expected to bear fruit soon for a stimulus bill.
A likely result of those talks will be immediate cash injections to Americans, Mnuchin said. Also involved could be tax deferments for companies and individual tax filers.
Earlier in the morning, the Federal Reserve announced a facility that will help loosen up the market for short-term debt that companies use to fund their operations. Known as commercial paper, the market has been gummed up lately, but Mnuchin said the new program could provide eligible businesses up to $1 trillion in 90-day unsecured credit.