Powell: ‘Coronavirus’ risk could prompt Fed to take ‘appropriate action’ to support economy

The coronavirus poses “evolving risks” to economic activity, and the nation’s central bank is pledging to use its toolbox to shore up the economy, the chair of the bank’s board said in a statement Friday.

“The fundamentals of the U.S. economy remain strong,” Federal Reserve Board Chair Jerome H. (“Jay”) Powell said in the brief statement. “However, the coronavirus poses evolving risks to economic activity,” he added. (The disease referred to as “coronavirus” is now known officially as “Covid-19.”)

To that end, the Fed chair added, the central bank is “closely monitoring developments and their implications for the economic outlook.

“We will use our tools and act as appropriate to support the economy,” he concluded.

Some have already interpreted the Fed chair’s statement as an indication that the rate-setting Federal Open Market Committee (FOMC) is ready to cut interest rates if necessary (although neither Powell’s statement, nor any other release from the Fed, suggested that possibility).

Statement from Federal Reserve Chair Jerome H. Powell

 

 

 

 

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