Treasury Secretary Steven Mnuchin told CNBC on Friday the market sell-off will be short-lived and looks like a compelling opportunity for investors looking to buy equities at a discount.
“This is a short-term issue. It may be a couple of months but we’re going to get through this and the economy will be stronger than ever,” the secretary said on “Squawk on the Street.”
“I look back at people who bought stocks after the crash in 1987, people who bought stocks after the financial crisis. For long-term investors, this will be a great investment opportunity.”
The Treasury secretary’s comments came just ahead of the market’s open after the worst day on Wall Street since 1987. The Dow Jones Industrial Average and the S&P 500 suffered their worst one-day hits in more than 30 years on Thursday as investor sentiment over the coronavirus pandemic deteriorated from uncertainty to panic.
Both major U.S. stock indexes ended their historic, 11-year bull market runs this week and are more than 20% below their respective record highs in bear markets.
But Mnuchin said the current sell-off isn’t at all like the systemic slowdown that occurred during the financial crisis 12 years ago. Instead, he compared it to short, intense sell-offs like the “Black Monday” crash in 1987, when Mnuchin was a trader.
“This is not like the financial crisis, where people don’t know when this will end: We will get through this,” Mnuchin added. “By the end of the year, I think you can expect we’re going to have a big rebound in economic activity.”
The Dow and S&P 500 bounced 5.5% shortly after the opening bell on Friday, paring some of the steep losses incurred over the last month.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.