Vice President Pence provides update on Trump administration's response to coronavirus
The risk to the American public from the coronavirus remains low, says Vice President Mike Pence.
President Trump took aim early Tuesday at the Federal Reserve Chairman Jerome H. Powell over the central bank's refusal to cut interest rates similar to other countries to defend against any looming financial downturns threatening the global economy due to the coronavirus.
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"Jerome Powell led Federal Reserve has called it wrong from day one," Trump tweeted. "SAD."
The president has been a vocal critic of Powell in the past and once asked who was a bigger enemy, the central bank leader or China's President Xi.
Powell recently said the U.S. economy is on sure footing, but stressed that the central bank stands ready to act if the coronavirus outbreak takes a turn.
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"The fundamentals of the US economy remain strong," Powell said in a statement last week. "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."
Goldman Sachs predicted that the Fed will likely cut rates by its next policy meeting later this month, MarketWatch reported. Economists from the company said they expect easing over the next several weeks and in a "coordinated fashion" with other countries.
Trump used the Reserve Bank of Australia in his tweet to illustrate the ways other countries are preparing to soften the financial blow of a global slowdown. The Wall Street Journal reported that Australia reduced interest rates by a quarter percentage point to 0.05%, a record low in the country.
Philip Lowe, the RBA’s governor, told the paper that the virus clouded the near-term outlook for the global economy, which means that growth will be lower than expected.
Christine Lagarde, the European Central Bank president, also reportedly warned about growth and said it stands ready to “take appropriate and targeted measures as necessary.”
The Dow Jones took a thrashing last week, but soared nearly 1,300 points on Monday.
Bill Nelson, chief economist at the Bank Policy Institute and a former Fed economist, said the Fed and other major central banks, possibly including China's, could announce coordinated rate cuts by Wednesday morning. The cut would at least be a half-point and perhaps even three-quarters, he said.
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"The only way to get a positive market reaction is to deliver more than expected," he said.
The Associated Press contributed to this report
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