US Federal Chair warns of 'disruptions in China that spill over to the rest of the global economy' after coronavirus death toll passes 1,000
- The coronavirus, which has spread around the globe but has mostly affected China, could have global economic impacts, Jerome Powell, the director of the Federal Reserve said.
- "We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said in prepared remarks to the House Financial Services Committee.
- Companies in China like Apple have shut down or scaled operations as a result of the outbreak that has killed at least 1,000 people and infected over 43,000.
- Visit Business Insider's homepage for more stories.
The coronavirus epidemic, which originated in Wuhan, China and has killed more than 1,000 people while infecting over 43,000, could have far-reaching impact on the global economy, Federal Reserve Chairman Jerome Powell reported on Capitol Hill Tuesday.
"We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said before the House Financial Services Committee in his semiannual report.
Last month, Powell warned that the coronavirus could have "very serious" implications on the global economy, but demurred, saying that it was "too early to say" how much damage the outbreak would cause.
"There will clearly be implications, at least in the near term, for Chinese output, and I guess for some of their closest neighbors, and we'll just have to see what the effect is globally," he said.
The coronavirus has spread to at least 25 countries around the globe beyond China, though the majority of the impact has been felt within China after the virus originated in the city of Wuhan, which is located in the country's Hubei province.
The virus has caused companies like Apple to halt much of its operations in the state. Foxconn, the Taiwanese company that manufactures Apple products in China, started to withdraw employees in a process that is expected to take weeks, the Financial Times reported Monday. According to CBS News, the company has brought back just 10% of its workforce, rendering much of its operations still shuttered. Apple's retail stores are not expected to re-open until February 15.
Meanwhile, the Chinese planning ministry instructed the country's provinces and cities to resume business operations at their own discretion depending on how the virus had spread in their individual regions.
Amid an ongoing trade war with China, which has cost American companies $46 billion since February 2018, Powell has spent the past year attempting to stabilize the US economy. His agency cut interest rates on three occasions in 2019 to boost the economy amid fears of a global economic slowdown that some economic forecasters attributed to the US-China trade dispute. While the US and Chinese government finalized phase one of trade negotiations in January, tariffs between the nations are ongoing.
"Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn," Powell told the House Financial Services Committee.
Read more:
Featured Digital Health Articles:
- Telehealth Industry: Benefits, Services & Examples
- Value-Based Care Model: Pay-for-Performance Healthcare
- Senior Care & Assisted Living Market Trends
- Smart Medical Devices: Wearable Tech in Healthcare
- AI in Healthcare
- Remote Patient Monitoring Industry: Devices & Market Trends