CHAIR POWELL. Good morning. Earlier today, the Federal Open Market Committee
announced a 1/2 percentage point reduction in the target range for the federal funds rate, bringing
the range to 1 to 1-1/4 percent. My colleagues and I took this action to help the U.S. economy
keep strong in the face of new risks to the economic outlook.
The fundamentals of the U.S. economy remain strong. The unemployment rate has been
near half-century lows for well more than a year, the pace of job gains has been solid, and wages
have been rising. These strong labor market conditions have underpinned solid household
spending, which has been the key driver of economic growth over the past year. At the time of
our FOMC meeting in January, prospects for continued economic growth remained favorable,
and we judged that monetary policy was well positioned to support that outlook.
Since then, the spread of the coronavirus has brought new challenges and risks. The
virus has afflicted many communities around the world, and our thoughts and prayers go out to
those who have been harmed. The outbreak has also disrupted economic activity in many
countries and has prompted significant movements in financial markets. The virus and the
measures that are being taken to contain it will surely weigh on economic activity, both here and
abroad, for some time. We are beginning to see the effects on the tourism and travel industries,
and we are hearing concerns from industries that rely on global supply chains. The magnitude
and persistence of the overall effects on the economy, however, remain highly uncertain, and the
situation remains a fluid one.
Against this background, the Committee judged that the risks to the U.S. outlook have
changed materially. In response, we have eased the stance of monetary policy to provide some
more support to the economy. Of course, the ultimate solutions to this challenge will come from
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others, particularly health professionals. We can and will do our part, however, to help keep the
U.S. economy strong as we meet this challenge. As always, our actions are guided by our
Congressional mandate to promote maximum employment and price stability.
In the weeks and months ahead, we will continue to closely monitor developments and
their implications for the economic outlook, and we will use our tools and act as appropriate to
support the economy.
Thank you, I will be happy to take a few questions.