Fed Chairman Powell Makes Unscheduled Statement on Coronavirus Economic Damage

It is not a normal event for Federal Reserve Chairman Jerome Powell to issue unscheduled statements about the financial markets and the economy. 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.

Jerome Powell issued a statement at 2:30 p.m. on Friday signaling that the FOMC is well aware of the fear that has taken place around the coronavirus outbreak causing a stock market meltdown. Powell said:

The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.

24/7 Wall St. has already issued its own views on the drop signaling what other moves the Federal Reserve and other central banks could take long with governments. This would be considered as extreme/alt quantitative easing measures.

At this point, we question just what exactly cutting interest rates would do. Does it seem more likely that people will travel on a plane or train to a resort and stay in a hotel and go out to eat if they are very worried about catching the coronavirus? That seems very unlikely.

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The Dow had been down over 1,000 points earlier on Friday and the Dow was last seen trading down 659 points at 25,106.79. Treasury yields remain under pressure too as the yield on the 10-year was down at just under 1.15% and the 30-year yield was challenging 1.65%. These are record-low yields this week.