Bullard Says Fed Watching Virus Fallout, Willing to Do More

The U.S. central bank is willing to act again if needed to shelter the U.S. economy from the impact of the spreading coronavirus, said Federal Reserve Bank of St. Louis President James Bullard.

“We correctly positioned the policy rate given what we knew,” Bullard said in an interview Friday on Bloomberg Television, referring to the Fed’s emergency 50 basis point cut on Tuesday. “Everything is on the table. We are willing to do more. But we are monitoring the situation. We can meet at any time.”

Financial markets have plunged wildly this week as investors seek to price the fallout from the spreading coronavirus, which is causing significant disruptions to economic activity in China, where it originated, and elsewhere. Treasury yields fell to record lows with the 10-year note touching 0.69%.

Investors now expect Fed officials to reduce their benchmark rate by at least another 50 basis points when they gather for their next regularly-scheduled policy meeting on March 17-18.

“‘I just don’t want people to focus so heavily on that particular day because the FOMC has already shown, Jay Powell has already shown, we can move between meetings,” Bullard said. “If we get to the March meeting and we don’t want to move at that particular day, that’s perfectly fine. But then you could get 10 days beyond that and things have deteriorated, maybe you decide to make a move then.”

— With assistance by Alix Steel, and Michael McKee

Source: Read Full Article