Federal Reserve Chairman Jerome Powell said the coronavirus “poses evolving risks” to U.S. economic growth and signaled the central bank is prepared to cut interest rates if necessary to support longest-ever expansion.
The statement issued by Powell before the financial markets closed for the U.S. weekend came as stocks posted their seventh-straight daily loss, prompting calls for near-term interest rate cuts from Wall Street banks. Yields on U.S. Treasury securities, one of the world’s safest assets, have fallen to record lows.
“The fundamentals of the U.S. economy remain strong,” Powell said in the statement Friday. “However, the coronavirus poses evolving risks to economic activity. 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.”
The S&P 500 jumped after the statement was released.
Fed officials in recent days have pushed back somewhat on the idea of an emergency rate cut saying there was too much uncertainty. Meanwhile, economists have been lowering their forecasts for both global and U.S. growth.
This article was provided Bloomberg News.