By Adina Solomon
ATLANTA (MaceNews) – It’s too soon to assess the economic fallout from the novel coronavirus — and its longer-term impact, Atlanta Federal Reserve Bank President Raphael Bostic said Wednesday.
“The difficulty for the coronavirus situation is that I don’t feel like I really know the whole story yet. Every day we learn a little more about how the virus is spreading and what countries it might be going to next,” Bostic said during a speech to the Harvard Business School Club of Atlanta. “It makes it very difficult to do forecasting as to what is now going to happen.”
The SARS outbreak in 2003 is the most recent similar experience, and that affected Chinese output for a quarter before the economy returned to normal, Bostic said. The SARS experience is the baseline until something changes, and the Fed is closely watching the coronavirus.
In general, the US economy is steady, with a historically low unemployment rate and stable inflation, Bostic said. Stable inflation is important because people need to have an idea of future prices to make long-term investments, he said.
Bostic added that conversations with businesses and consumers have shown that risk-taking is not rising to “a point of concern.”
“Expansions don’t die of old age,” Bostic said. “They die because people make decisions that introduce risk into the economy. Then those risks start to become more than the economy can bear. And then the economy starts to contract.”