Fed chair says it's 'too early' to talk about lowering rates over coronavirus. Trump isn't happy.
as a threat to the American economy but said he expected China to take further actions to limit the damage and suggested that it was “way too early” to talk about lowering interest rates as a policy response.
“When Jerome Powell started his testimony today, the Dow was up 125, & heading higher,” Trump tweeted. “As he spoke it drifted steadily downward, as usual, and is now at -15.” The Dow ended the day unchanged.. Many have already downgraded growth projections for certain nations. The outbreak has not only idled China’s economic activity, it is spilling over to neighboring economies and beyond.
“The question for us really is: What will be the effects on the U.S. economy? Will they be persistent? Will they be material?” he told members of the House Financial Services Committee. On Wednesday, Powell will appear before the Senate Banking Committee.Powell said that the American economy is in a “very good place.” Job creation is strong and the economy, in its record 11th year of expansion, is continuing to see moderate growth.
“I think you can expect the Chinese government to do lots of things to support economic activity, and they’ve said that ... they’re open to cushioning the economic effects,” Powell said. UBS economists said construction activity has been suspended even into April in some parts of China. Chinese tourism and consumer spending have plunged, and many multinational businesses are facing disruptions and delays in production.In a survey last week of member companies operating in China, the American Chamber of Commerce in Shanghai found that 87% said the coronavirus will have a direct impact on revenue this year, with 24% expecting sales to fall by 16% or more.
Since then, the central bank has stood pat on its benchmark rate, at between 1.5% and 1.75%, and Powell on Tuesday reinforced the Fed’s stance that monetary policy was in the right place for now.
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