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| In Rare Statement, Fed Chair Keeps Rate Cut on Table as Virus Risks Roil Markets | In Rare Statement, Fed Chair Keeps Rate Cut on Table as Virus Risks Roil Markets |
| (7 days later) | |
| The Federal Reserve chair, Jerome H. Powell, in an attempt to soothe jittery investors, issued a short statement Friday afternoon reaffirming that the central bank would use its tools and “act as appropriate to support the economy.” | The Federal Reserve chair, Jerome H. Powell, in an attempt to soothe jittery investors, issued a short statement Friday afternoon reaffirming that the central bank would use its tools and “act as appropriate to support the economy.” |
| While Mr. Powell said that the “fundamentals of the U.S. economy remain strong,” he also noted that “the coronavirus poses evolving risks to economic activity” and that the Fed “is closely monitoring developments and their implications for the economic outlook.” | While Mr. Powell said that the “fundamentals of the U.S. economy remain strong,” he also noted that “the coronavirus poses evolving risks to economic activity” and that the Fed “is closely monitoring developments and their implications for the economic outlook.” |
| The statement came as stock markets in the United States tumbled for the seventh day as the continued spread of the coronavirus stoked fears that the world was on the cusp of a pandemic and, potentially, a recession. Expectations that the central bank will cut borrowing costs have skyrocketed as new coronavirus cases outside China continue to mount, and economists saw Mr. Powell’s statement as a signal that the Fed would act soon to offset any economic fallout. | The statement came as stock markets in the United States tumbled for the seventh day as the continued spread of the coronavirus stoked fears that the world was on the cusp of a pandemic and, potentially, a recession. Expectations that the central bank will cut borrowing costs have skyrocketed as new coronavirus cases outside China continue to mount, and economists saw Mr. Powell’s statement as a signal that the Fed would act soon to offset any economic fallout. |
| “It was certainly an attempt to calm things down,” said Torsten Slok, an economist at Deutsche Bank. “This is the strongest hint you can make that a rate cut is coming.” | “It was certainly an attempt to calm things down,” said Torsten Slok, an economist at Deutsche Bank. “This is the strongest hint you can make that a rate cut is coming.” |
| Coronavirus cases in South Korea, Japan and Italy are climbing fast, prompting factories to close and contributing to a steep falloff in tourism. While there have been comparatively few confirmed infections in the United States, public health officials have warned that clusters of infection are very likely to appear, potentially resulting in quarantines and production slowdowns. | Coronavirus cases in South Korea, Japan and Italy are climbing fast, prompting factories to close and contributing to a steep falloff in tourism. While there have been comparatively few confirmed infections in the United States, public health officials have warned that clusters of infection are very likely to appear, potentially resulting in quarantines and production slowdowns. |
| Stock market indexes have slumped on virus worries, and money has been pouring into United States government securities as people look for safe investments, pushing prices up and the yields on 10-year Treasuries to record lows. | Stock market indexes have slumped on virus worries, and money has been pouring into United States government securities as people look for safe investments, pushing prices up and the yields on 10-year Treasuries to record lows. |
| President Trump, who has played down the economic threat to the United States from the virus, said on Friday that he hoped the Fed would step in soon and cut rates. | President Trump, who has played down the economic threat to the United States from the virus, said on Friday that he hoped the Fed would step in soon and cut rates. |
| “I hope the Fed gets involved and I hope it gets involved soon,” Mr. Trump told reporters at the White House before heading to a rally in South Carolina. The president has routinely criticized the Fed for not cutting rates more aggressively. | “I hope the Fed gets involved and I hope it gets involved soon,” Mr. Trump told reporters at the White House before heading to a rally in South Carolina. The president has routinely criticized the Fed for not cutting rates more aggressively. |
| Investors have also begun looking to the Fed for an economic rescue. Markets have fully priced in a rate cut by the Fed’s meeting in March — something they saw as highly unlikely only a week ago. Economists at Bank of America wrote on Friday that they now expected a 50-basis point cut next month. Rates are currently 1.5 percent to 1.75 percent. | Investors have also begun looking to the Fed for an economic rescue. Markets have fully priced in a rate cut by the Fed’s meeting in March — something they saw as highly unlikely only a week ago. Economists at Bank of America wrote on Friday that they now expected a 50-basis point cut next month. Rates are currently 1.5 percent to 1.75 percent. |
| “An emergency cut by the Fed prior to the meeting is possible — it will depend on the extent of market dysfunction,” they wrote. | “An emergency cut by the Fed prior to the meeting is possible — it will depend on the extent of market dysfunction,” they wrote. |
| The stock market trimmed its losses after Mr. Powell’s statement was released at 2:30 p.m., but remained in significantly negative territory. | The stock market trimmed its losses after Mr. Powell’s statement was released at 2:30 p.m., but remained in significantly negative territory. |
| “The statement is a step in the right direction, but it stops short of what is needed, which I think is a statement that says that the Fed can act preemptively to support the economy,” said Roberto Perli, an economist at Cornerstone Macro. “It’s missing a sense of timing.” | “The statement is a step in the right direction, but it stops short of what is needed, which I think is a statement that says that the Fed can act preemptively to support the economy,” said Roberto Perli, an economist at Cornerstone Macro. “It’s missing a sense of timing.” |
| Mr. Powell’s colleagues have expressed concern about the coronavirus, but several have also signaled that they were not ready to lower interest rates. James Bullard, the president of the Federal Reserve Bank of St. Louis, said during a speech in Florida earlier Friday that “we could cut rates if we got a global pandemic that actually develops with health effects that seem to be approaching the same level as seasonal influenza, but that doesn’t look like the baseline as of today.” | Mr. Powell’s colleagues have expressed concern about the coronavirus, but several have also signaled that they were not ready to lower interest rates. James Bullard, the president of the Federal Reserve Bank of St. Louis, said during a speech in Florida earlier Friday that “we could cut rates if we got a global pandemic that actually develops with health effects that seem to be approaching the same level as seasonal influenza, but that doesn’t look like the baseline as of today.” |
| The statement by the Fed chair underlines that the most important member of the 17-person Federal Open Market Committee is closely focused on an unfolding public health concern. | The statement by the Fed chair underlines that the most important member of the 17-person Federal Open Market Committee is closely focused on an unfolding public health concern. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| Loretta J. Mester, the president of the Federal Reserve Bank of Cleveland and a monetary policy voter this year, said in an interview on Thursday that the Fed should keep its options open. Ms. Mester, who is generally cautious about such moves, initially opposed the Fed’s decision last year to lower borrowing costs three times. | Loretta J. Mester, the president of the Federal Reserve Bank of Cleveland and a monetary policy voter this year, said in an interview on Thursday that the Fed should keep its options open. Ms. Mester, who is generally cautious about such moves, initially opposed the Fed’s decision last year to lower borrowing costs three times. |
| “We always have to come in with open minds about what’s going on with the economy, and every day we’re getting new information, especially with something that’s fast-moving, like this,” Ms. Mester said when asked whether a cut next month was possible. | “We always have to come in with open minds about what’s going on with the economy, and every day we’re getting new information, especially with something that’s fast-moving, like this,” Ms. Mester said when asked whether a cut next month was possible. |
| Explaining how she viewed the Fed’s calculus, Ms. Mester said officials should try to gauge whether there will be longer-lasting economic effects from the virus, such as a hit to consumer confidence and demand. | Explaining how she viewed the Fed’s calculus, Ms. Mester said officials should try to gauge whether there will be longer-lasting economic effects from the virus, such as a hit to consumer confidence and demand. |
| “If people are temporarily staying home, not traveling, not interacting and purchasing things, that could be a short-term hit,” she said. “Or it could develop into something broader — and that’s the kind of calculus you have to do when you’re thinking about monetary policy.” | “If people are temporarily staying home, not traveling, not interacting and purchasing things, that could be a short-term hit,” she said. “Or it could develop into something broader — and that’s the kind of calculus you have to do when you’re thinking about monetary policy.” |
| Though he said he was optimistic that the virus would be contained, Mr. Bullard also declined to rule out a Fed rate cut in March, or even before, should things worsen. | Though he said he was optimistic that the virus would be contained, Mr. Bullard also declined to rule out a Fed rate cut in March, or even before, should things worsen. |
| “I wouldn’t want to prejudge the March meeting,” he said. “Obviously the situation is very fluid, and we’re going to want to monitor events right up until the meeting.” | “I wouldn’t want to prejudge the March meeting,” he said. “Obviously the situation is very fluid, and we’re going to want to monitor events right up until the meeting.” |
| Asked if the Fed would consider an emergency cut before its next meeting, Mr. Bullard said he also did not “have a sense” of whether that was possible. | Asked if the Fed would consider an emergency cut before its next meeting, Mr. Bullard said he also did not “have a sense” of whether that was possible. |