Scott Mlyn | CNBC
CNBC’s Jim Cramer said on Monday that financial turmoil from the coronavirus shows that monetary policy is no longer an appropriate solution.
“This is just the need for fiscal policy,” Cramer said on “Squawk on the Street.” “Monetary policy is over.”
Last week, the Federal Reserve cut interest rates by a half percentage point in response to the growing economic threat from COVID-19.
Cramer has been critical of that decision, arguing the government should actually be stepping up to provide financial help to small and medium-sized businesses who may see significant challenges from the disease’s spread. Those businesses should have an opportunity to access zero-interest loans, for example, Cramer said Monday.
Cramer’s comments Monday came as futures on the Dow Jones Industrial Average showed an implied opening drop of about 1,300 points. Futures overnight were halted from falling further after hitting a level known as “limit down.”
The Dow tanked about 1,800 points or over 7% after Monday’s open. The S&P 500 went down over 7% shortly after that, triggering the first of “three circuit breaker thresholds.” Trading was paused for 15 minutes.
Oil prices was also plunging Monday after OPEC failed to secure a production cut deal, and Treasury yields are dropping too as investors flock to the perceived safety of bonds. Yields move inversely to prices.
The turbulence Monday comes as the coronavirus outbreak continues to spread around the global, sparking increased fear around the disease’s economic impact.
There are more than 111,200 confirmed coronavirus cases in the world and at least 3,890 deaths, according to data compiled by Johns Hopkins University.
There are at least 564 cases in the U.S. and at least 22 deaths.