US Federal Reserve ‘closely monitoring’ coronavirus outbreak

The US Federal Reserve is “closely monitoring” the spread of the coronavirus and its potential impact on the global economy, its chairman has said.
Jerome Powell said there would “clearly be implications at least in the near term” for growth in China and neighbouring countries.

Mr Powell was speaking after the US central bank said it was keeping its key interest rate unchanged, and painted a mostly bright picture of the American economy.
He also said there was “cautious optimism” about the global outlook – pointing to the easing in trade tensions and the reduced likelihood of a no-deal Brexit.
But uncertainties remained “including those posed by the new coronavirus”, Mr Powell added.

Advertisement

The Fed chairman said the outbreak was a “very serious issue” and acknowledged the “significant and considerable human suffering that the virus is already causing”.

He added: “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.

More from Business

“The situation is really in its early stages and it’s very uncertain about how far it will spread and what the macroeconomic effects will be in China and its immediate trading partners and neighbours, and around the world.
“Of course, we are very carefully monitoring the situation…. It’s too early to say what the effects will be.
“There will clearly be implications at least in the near term for Chinese output and I would guess for some of their close-in neighbours and we’ll just have to see what the effect is globally.”

Image: Starbucks has shut half its stores in China
Mr Powell was speaking as major companies around the world reacted to the outbreak by suspending some operations in China.
Starbucks has closed about 2,000 stores in the country while McDonald’s shut all its restaurants – numbering several hundred – in the affected Hubei province.
British Airways has halted all flights to China and American Airlines suspended Los Angeles routes to and from Shanghai and Beijing.
Apple chief executive Tim Cook has said the company’s suppliers in the country have been forced to delay the reopening of factories that had been closed for the Chinese new year holiday.

Source : Sky News