Powell opens door to Fed rate cut on 'evolving' risks from virus


"Powell's statement is a strong signal that the Fed is about to cut rates, and it is highly likely that this will be a series of cuts", said Sung Won Sohn, an economics and finance professor at Loyola Marymount University in Los Angeles.

The US dollar on Friday slid to a seven-week low against the Japanese yen after US Federal Reserve Chair Jerome Powell suggested that the central bank could cut interest rates in the wake of COVID-19.

"We will use our tools and act as appropriate to support the economy", Powell said.

Bullard does not vote on the Fed's interest rate policy panel this year, but outlined in detail how he views the set of risks that have driven global equity markets into a broad selloff.

But with interest rates already low, the Fed has little room to maneuver to support growth in the event of an economic slowdown. Fed No. 2 Richard Clarida said Tuesday that "it is still too soon to even speculate" about the scale or persistence of the impact from the virus on the United States economy. This isn't anything new coming from the president that has regularly criticized the Fed for not cutting rates more aggressively.

The Fed cut rates at its meetings in July, September and October, but has since been on hold and indicated it planned to be so long as there was no "material change" to the outlook.

St. Louis Fed President James Bullard discussing the effect of the new coronavirus on the global and US economies during a presentation in Fort Smith, Ark., on February 28, 2020.

The Fed did not appear rattled by coronavirus, which is now spreading more quickly outside its epicenter of China than within it.

New coronavirus case of 'unknown origin' confirmed in California
Mayor Bill de Blasio also said that the CDC has sent new kits that will allow the city to run the federal agency's test locally. The Oregon Health Authority told state lawmakers earlier Friday that were NO cases of the virus in the state.

Goldman Sachs Group Inc. economists said Friday they now expect the coronavirus to inflict a "short-lived global contraction" on the world economy that forces the Fed to slash interest rates by 75 basis points over the first half of this year.

"It's doubtless that markets will power the Fed to cut even earlier than the March 18 assembly, and the query is, will that matter?"

"An emergency rate cut is unlikely, as these are rare".

He has acknowledged the epidemic will likely prevent U.S. growth from reaching three percent in 2020, as he had promised, but on Friday said the stock markets will recover if he is reelected.

"I wouldn't want to prejudge the March meeting", he told reporters.

Goushi Kataoka, one of the most dovish members of the BOJ's nine-member board, said he saw no immediate need to take monetary policy action in response to the virus outbreak. That would lower overall gross domestic product by 0.2 percentage points, to 1.8%.

"I hope the Fed gets involved, I am not a big fan of the Fed, they make a lot of mistakes", said Trump before departing for his rally in North Charleston, South Carolina. Then again, it's not a usual even to see the stock market fall 10% in just six trading days along with record low long-term Treasury yields. "The best idea is to focus on public health".

The Dow Jones Industrial Average fell more than 3,500 points in its worst week since the 2008 financial crisis.