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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 |
| (3 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. |
| 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. |
| Updated June 12, 2020 | Updated June 12, 2020 |
| 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. | |
| 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. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| 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. |
| 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.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| 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. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| “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. |