Federal Reserve Chairman Jerome Powell said the coronavirus has brought the economy to an “abrupt halt” and it was uncertain how long the slowdown would last, as officials held interest rates near zero — and pledged to keep them there until the nation was back on track.
“Economic activity will likely drop at an unprecedented rate in the second quarter,” Mr. Powell told a video media conference Wednesday. “It may well be the case that the economy will need more support from all of us, if the recovery is to be a robust one.”
The Federal Open Market Committee said in a unanimous statement that it “will use its tools and act as appropriate to support the economy” and cautioned the pandemic would weigh on the economy over the medium term.
U.S. stocks held gains after the Fed’s statement while yields on 10-year Treasury notes edged up slightly to 0.62%.
Mr. Powell emphasized several times the importance of fiscal policy to help and said “this is not the time” to allow concerns about the size of the federal deficit to hinder the scale of the response.