The crisis response has been further complicated by a lack of top staffers at Treasury, along with a dearth of expertise managing such crises. Currently, the department does not have officials overseeing two top divisions, domestic finance and sanctions.
Treasury’s acting assistant secretary for international finance, Geoffrey Okamoto, is departing to be the first deputy managing director of the International Monetary Fund. And Brian McGuire, the assistant secretary for legislative affairs, is expected to leave this spring.
A senior Treasury official noted that Mr. Mnuchin had been speaking with Mr. Powell by phone multiple times a day and into the evenings in recent weeks. His deputy, Justin Muzinich, has also been in regular communication with counterparts at the Federal Reserve Bank of New York.
Treasury has developed an internal task force to assess the economic fallout of the virus. Mr. Muzinich, who had been overseeing the terrorist and financial intelligence unit, has shifted much of his focus domestic finance. Treasury’s markets room now has nine full-time staff members providing updates to the secretary and, according to the official, the department is open to bringing in additional reinforcements as needed.
But the light staffing has made it hard for any one official to communicate to the American public that the nation’s economic leaders stand ready to do what it takes to calm markets and safeguard prosperity.
Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said the administration was failing to bolster markets. “Everywhere you would look for reassurance, for leadership, for policy action, for reliable information, all are absent,” he said.
Those perceptions have obscured what has been a fast-paced response from the central bank.
The Fed is often a first responder when something goes wrong in the economy. It is able to change interest rates and buy bonds much faster than elected officials can pass legislation and mail out checks.