i'm jamie colby for "strange inheritance." thanks so much watching. and remember -- you can't take it with you. ♪ happy weekend everybody. what a week it was. welcome to the program that analyzes the week that was in helps position you for the week ahead. big show ahead right now, coming up in just a few moments steven mnunchin, my special guest to discuss the stimulus package. then later on right here, rick reeder is here to talk about how to navigate during this

crisis. he is in charge of $2.3 trillion. relief is on the way for millions of americans meanwhile and has a 2 trillion-dollar 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, i've approved all the requests so far, we've 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 didn't wait for congress to act, we've already started using this, we didn't 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, it's 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. i'm 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 brand-new program, working with the sba, we are doing everything we can because americans need that money now. we can't 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 can't 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 didn't think it would be fair to send certain states $400 and other $800. on a bipartisan basis, the banking committee picks $600 across-the-board. >> so when you said yesterday these numbers don't 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 short-term, 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 it's unemployment claims or other numbers, this doesn't 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 i've been very clear this is not an airline bailout. the taxpayers need to be compensated for relief they're 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. it's 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. they've 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 don't 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, that's 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 i'm 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. >> it's 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. don't go anywhere. my one-on-one with steven reeder is next. tv sports announcer: five seconds left. oh ho! yeah, that's my man there. tv sports announcer: time out. let's go to a commercial. nooooooo! not another commercial!

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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. it's 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 they're throwing this extraordinary massive stimulus. characterize what we are seeing. we've 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 they've done and what the fiscal side has done has just thrown everything at it and frankly it's really impressive. if it didn't 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 what's 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 it's unlikely to be resolved as quickly as it arrives, however, you think we actually could avoid a

recession. >> depends on, there's an economic definition of recession that's two consecutive quarters of negative growth. i think what's can happen is the economy will decline and is decline particularly across some industries that are shut down so you will have something that's 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 that's 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 there's 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 pent-up demand. >> so the math around it is tricky because you could have numbers that are down 20%. quarter or more, i've actually seen the more than that, and then rebound of 5 - 8%. quarter on the backside and were even bigger than that. there's no doubt you can see that sort of dynamic happening. what's 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 you're 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, it's 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 i've ever been associated with and it's all about interpreting how does the monetary transition into ambridge to what should be roughly back to normal. i don't 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 we've hit bottom already? do you think the market, equity market has hit bottom. >> my guess is they've hit bottom because it was such a profound decline and then you've 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 i'm 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 we've seen the bottom but i wouldn't write off that were going to go down a bit further. what areas of business are going to get the most help. let's 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. my money should work as hard as i do. so i use my freedom unlimited card to buy all the latest tech stuff. today, i'm earning on a charger. so, just the charger then?

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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 mortgage-backed, by treasury, is that how you're 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. we'll 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 there's 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.

that's powerful and will be significant. longer term, as you get into small business, that will have a real impact. the money that's 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 you're 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 he's really pushing back on this idea. you just heard steven mnunchin say look, we'll 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. it's a hard industry today because you don't know what the recoveries going to look like so listen, i think in today's environment, you take small pieces of the airline, may be but that is so profound or potentially so profound that i'd 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, there's a lot of people who would say we don't want negative rates the way europe is, but we've got them in some corners, right. >> we have them where its cash

, the demand for cash, your seeing bills, it's an embodiment of people who just want to give something that is cash or cash like. listen, we don't want negative interest rate. the fed, what they're doing, it's 100% right. they said were not gonna take rates to zero which they've done, and then, in the funds rate and the front end of the curve, then we will keep buying assets. that's 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, that's the right way to do it. we don't want negative interest rates. it didn't work in europe, doesn't work in japan and it's so hard to come back from it. what the fed is doing is exactly right and we don't want negative interest rates. maria: it's 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. don't go away.

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maria: welcome back. i we'll be back next weekend. don't forget to join us. be sure to watch every weekend at 9:00 p.m. eastern right here. i'll see you sunday morning over on the fox news channel. sunday morning futures is live 10:00 a.m. eastern sunday. i'll 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 muchor joining us. have a great rest of the weekend. i will see you again next time. ♪ ♪ ♪ ♪ ♪ >> hello and welcome to the wall street journal at large. here in america we are several weeks deep into the response to the coronavirus outbreak and as we've seen from the start, events this week have moved at breakneck speed. the u.s. passed china with the total cases reported. new york center became the clear epicenter of accounting for one third of the cases nationwide. the senate finally hammered out the biggest bailout and history. the massive 2 trillion-dollar pl