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Fed calls the coronavirus a ‘new risk to global growth outlook’


Federal Reserve Chair Jerome Powell arrives for a news conference following the Federal Open Market Committee meeting in Washington, December 11, 2019.

Joshua Roberts | Reuters

Though the coronavirus had just taken hold when the Federal Reserve met in January, officials already expressed concern about its potential economic impacts.

“The threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching,” minutes released Wednesday from the Federal Open Market Committee’s Jan. 28-29 meeting said.

Central bank policymakers said, for instance, that if the virus spread it could hit what appeared to be an improving growth picture in China.

The minutes noted that “early GDP releases showed a pickup in growth in China and some other Asian economies, though news of the coronavirus outbreak raised questions about the sustainability of that pickup.”

Officials also cited the potential impact on stocks, though the market has been performing well. Negative headlines about the virus have caused some volatility.

“Late in the period, concerns about the spread of the coronavirus and uncertainty about its potential economic effect weighed negatively on investor sentiment and led to moderate declines in the prices of risky assets,” the minutes said.

Officials also commented on the impact the disease had on China’s currency, which had been appreciating but tailed off as the news cycle intensified.

Those statements come amid continuing concern about the virus not only as a health threat but also as an economic one to a global growth picture that has been wobbly.

International Monetary Fund Managing Director Kristalina Georgieva called the COVID-19, outbreak the “most pressing uncertainty” in the world now.

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