Amid a tumbling stock market and questions about how the White House is handling the coronavirus epidemic, Federal Reserve Chairman Jerome Powell said Friday the virus "poses evolving risks to economic activity."
“The fundamentals of the U.S. economy remain strong,” Powell said in a statement released Friday afternoon. “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.”
Initial market reaction was muted, with the Dow Jones Industrial Average still chalking up a decline of around 700 points, down from a 1,000-point loss at the opening bell.
Powell's comments underscore the mixed messaging from President Donald Trump's administration, with National Economic Council Director Larry Kudlow telling an audience Friday "the virus is not going to sink the American economy.”
What could “sink the economy,” said Kudlow, who was speaking at the Conservative Political Action Conference in Maryland, is “the socialism from our friends on the other side of the aisle.”
Federal Reserve officials unanimously agreed at its last meeting, in January, to make no change to the nation's benchmark interest rate, defying calls from Trump to lower rates in order to align with other central banks.
