By Linda O’Flanagan
The Federal Reserve left interest rates unchanged last week as chairman Jerome Powell said the central bank continues to monitor ongoing risks, including trade tensions and the coronavirus outbreak in China.
“We expect moderate economic growth to continue,” said Powell, adding that “uncertainties about the outlook remain, including those posed by the new coronavirus.”
Powell said it was too early to tell what the impact of the virus would be on China or the world’s economies.
He called the virus that has killed over 430 people and disrupted business in China “very serious” adding. “There is likely to be some disruption to activity in China and possibly globally based on the spread of the virus to date and the travel restrictions and business closures that have already been imposed.
“The situation is really in its early stages and its very uncertain about how much it will spread and what the macroeconomic effects would be in China and its immediate trading partners and neighbors and around the world.
“We are very carefully minoring the situation. Our framework, ultimately, is what are the potential ramifications for the U.S. economy and for the achievement of our duel mandate.”
More broadly, Powell said there are grounds for “cautious optimism” about the outlook for the global economy.
Many analysts are predicting an uptick in growth following a weak fourth quarter of 2019.