The Federal Reserve believes current US interest rates and monetary policy are appropriate to offset any downside impact from the coronavirus outbreak, newly published minutes from the central bank's last monthly meeting showed on Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 20th February, 2020) The Federal Reserve believes current US interest rates and monetary policy are appropriate to offset any downside impact from the coronavirus outbreak, newly published minutes from the central bank's last monthly meeting showed on Wednesday.
While the pandemic in China had already begun making its impact on US and global markets by the time the Federal Reserve held its January 28-29 meeting, the central bank's voting committee, known as the FOMC, "judged that it would be appropriate to maintain the target range for the federal funds rate at 1 to 1 percent to support sustained expansion of economic activity."
Separately, Federal Reserve Chairman Jay Powell told the US Congress on February 11 that the coronavirus crisis will have "some impact" on the US economy, though it was too early to tell what that would be.
In its minutes, the central bank said despite signs of reduced risks to global outlook and some stabilization in economic activity abroad, financial market participants' views on the likely course of US monetary policy appeared to have changed little over the inter-meeting period.
"They expected economic growth to continue at a moderate pace, supported by accommodative monetary and financial conditions," the minutes said. "Nonetheless, uncertainties about the outlook remained, including those posed by the outbreak of the coronavirus."
While early GDP releases showed a pickup in growth in China and some other Asian economies, news of the coronavirus outbreak also raised questions about the sustainability of that trend, the minutes said.
US investment bank Morgan Stanley said on Wednesday Chinese first-quarter growth could fall as low as 3.5 percent due to the coronavirus, which has killed more than 2,000 people and infected over 74,000 in China.
