CCTV Transcripts

CCTV Script 07/04/20

— This is the script of CNBC's news report for China's CCTV on April 7, 2020, Tuesday.

Trump administration was in preliminary discussions about issuing a coronavirus bond, said Kudlow, but he believes raising essential funds to support US families, individuals and businesses is necessary, he is all for it.

Larry Kudlow

Director of the United States National Economic Council

This is a time it seems to me,to sell bonds in order to raise money for the war effort in this case, the pandemic

Effort in this case, the effort to keep families and individuals and businesses afloat. I am all for it

In an interview with CNBC, former federal reserve chair Janet Yellen also expressed support for the idea of issuing a corona bonds because the federal government is running an excessive budget deficit, which is expected to rise further due to COVID-19.

Janet Yellen

Former Chair of the Federal Reserve

Well, you know, the federal government is going to have enormous deficits. They're already running at about a trillion dollars for this coming or this year before the fiscal interventions. And now we're probably looking at deficits well above 2 trillion. So thinking about how to finance those reforms is something very worthwhile. Maybe a war bond is an appropriate approach. 

The United States has launched a $2.2 trillion stimulus package to fight the outbreak and boost the economy, and is discussing a fourth round that would widen the U.S. budget deficit. By some estimates, the federal deficit will soon reach its highest level as a share of GDP since the second world war. In Europe, governments have also disbursed large sums of money to deal with the outbreak.

Nine European countries, including Italy, Spain and France, have asked EU countries to pay part of the costs of responding to COVID -19 by jointly issuing so-called corona bonds. However, the idea has provoked strong opposition from Germany and the Netherlands, both of which are reluctant to take such action.

There is relatively little political resistance to issuing similar bonds in the US.

Yellen pointed out that the current ultra-low interest rate environment has also reduced the burden of the US government's bond issuance, which is operational and relatively controllable.

Janet Yellen

Former Chair of the Federal Reserve

We're fortunate the government is fortunate that we are in the low interest rate environment so that the interest burden of that debt is likely to be manageable, at least for many years to come. But it is certainly appropriate to think about the best way to finance the debt and deficits. 

In the second half of last year, Treasury secretary Steven Mnuchin said he was seriously considering issuing 50-year Treasury bonds and would consider issuing 100-year Treasury bonds if the issue was successful. At the time, however, Wall Street was lukewarm.

So, we still need to see whether the idea of issuing a coronavirus treasury bond this time is possible.