Federal Reserve Chairman Jerome Powell said the COVID-19 “poses evolving risks” to U.S. economic growth and signaled the central bank is prepared to cut interest rates if necessary to support the country’s longest-ever expansion.
The statement issued Friday by Mr. Powell before the financial markets closed for the U.S. weekend came as stocks posted their seventh-straight daily loss, a slump which earlier prompted a string of Wall Street banks to predict the Fed would soon start reducing rates. Yields on U.S. Treasury securities, one of the world’s safest assets, have fallen to record lows.
“The fundamentals of the U.S. economy remain strong,” Mr. Powell said Friday in a brief statement. “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.”
The S&P 500 jumped after the statement was released and continued to pare earlier losses.