The coronavirus outbreak will 'very likely' affect the US economy, Fed warns
- A deadly viral outbreak in China is poised to affect the US economy, but it's too soon to estimate to what extent, Fed Chair Powell warned Tuesday.
- Powell emphasized that the US economy was in a solid place but that the coronavirus presented new risks.
- A growing number of major companies have warned of fallout from the coronavirus.
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A deadly viral outbreak in China is poised to affect the US economy, but it's too soon to estimate to what extent, Federal Reserve Chairman Jay Powell warned 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 told the House Financial Services Committee during a semiannual report on monetary policy.
Powell emphasized that the US economy was in a solid place and that the central bank was comfortable with the current Fed policy rate of between 1.5% and 1.75%. But he added that the central bank would closely monitor the economic risks from the coronavirus, which has killed more than 1,000 people and spread to at least two dozen countries.
"We know that there will be some - very likely be some effects on the United States," he said. "I think it's just too early to say, we have to resist the temptation to speculate on this."
Officials have placed new restrictions on travel and trade over recent weeks as they scrambled to contain the outbreak.
A growing number of major companies have warned of fallout from the coronavirus, saying that store closures and other supply chain disruptions would chip away at revenue this year.
Powell said the Fed would look for "persistent" and "material" economic effects as it assessed the outbreak, noting that there was not yet enough information available to estimate whether it would change the overall outlook.
"I think it's just too early to say," he added. "We have to resist the temptation to speculate on this."