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Powell says Fed has eye on virus

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The Federal Reserve is monitoring the COVID-19 issue and its economic effects, according to a release from the central bank, attributed to Chairman Jerome Powell, released Friday.

“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” Powell said. “The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”

Jerome Powell
Federal Reserve Board Chair Jerome Powell

In recent speeches many Fed officials and presidents have said it was too early to determine the economic impact of the virus and too soon for the Fed to move.

"The Fed is ready, willing and able to backstop the financial markets," said George Boyan, president of Leumi Investment Services. "It doesn’t have the cure for coronavirus, but it can stabilize the market."

Morgan Stanley Research said: "A 25bp Fed rate cut is coming at the March meeting, in our view. Increasing uncertainty about the economic outlook means future rate moves beyond March are conditional on developments with the coronavirus and on developments in financial markets, and particularly in credit markets."

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Coronavirus Federal Reserve Jerome Powell Monetary policy FOMC