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Friday, March 29, 2024

Fed keeps rates steady while monitoring coronavirus

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Fed keeps rates steady while monitoring coronavirus
Fed keeps rates steady while monitoring coronavirus

The Federal Reserve held interest rates steady at its first policy meeting of the year and said it was carefully monitoring the coronavirus outbreak in China for any implications on the U.S. economy.

Conway G.

Gittens reports.

Steady as it goes... That was the message from the Federal Reserve Wednesday after the central bank left its key lending rate in the 1.5% to 1.75 % range following its first meeting of 2020.

Fed Chairman Jerome Powell says keeping rates where they are, after three rate cuts last year is appropriate.

He says moderate economic growth and a strong labor market are still being offset by a weak global factory sector, as seen through purchasing manager indexes or PMIs, even though there are new U.S. trade deals with China, Canada and Mexico.

(SOUNDBITE)(ENGLISH) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "Trade policy uncertainty remains elevated, businesses continue to identify it as an ongoing risk.

We still have two or even three active discussions that are going on in the public square right now.

So it hasn't gone away.

Manufacturing PMIs have started to tick up consistently among both advanced economies and emerging market economies.

We do not see a decisive recovery." And there is a new wild card to consider.

The outbreak of the coronavirus virus in China, not only threatens the world's second biggest economy, but could weigh on global trade and eventually the U.S. economy.

SOUNDBITE: (ENGLISH) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "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.

Of course the situation is really in its early stages and it is very uncertain about how far it will spread." Powell says in light of that uncertainty - the Fed will be carefully monitoring the situation.

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