FILE PHOTO: Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido
March 6, 2020
(Reuters) – U.S. Federal Reserve officials said on Friday they will consider various scenarios when they gather at the March policy meeting to discuss what other steps could be taken to protect the economy from the downside risks of the coronavirus outbreak.
If the situation worsens, low-wage workers in particular could suffer financially if they are required to stay home from their jobs for weeks without pay, Chicago Fed Bank President Charles Evans said on a panel at an event hosted by the Shadow Open Market Committee in New York.
Under that scenario, it will be important to support consumers, the driving force in the economy, Evans said.
“The most effective tools would be getting some type of liquidity and funds in the hands of the people who need it the most,” Evans said. “The consumer has been very strong in the recovery, and so maintaining that has the greater hope of maintaining the recovery and expansion going forward,” he said.
Cleveland Fed President Loretta Mester, speaking on the same panel, said the central bank’s rate-setting Federal Open Market Committee would be looking at various scenarios regarding how to deal with the coronavirus outbreak at the March meeting.
“When we come into the room, that’s when we have those discussions about what we’re seeing in terms of the economic environment,” she said.
The Fed cut interest rates by half a percentage point this week in an emergency move meant to boost the economy and counter the negative effects of the spreading coronavirus. The central bank’s key overnight lending rate is now in a target range of 1.00% to 1.25%.
(Reporting by Jonnelle Marte; Editing by Chizu Nomiyama and Paul Simao)
