Monday, August 3

Highlights: Quotes from Federal Reserve Chair Powell’s press conference

WASHINGTON (Reuters) – The U.S. Federal Reserve and global central banks moved aggressively on Sunday to buttress a world economy unravelling rapidly amid the coronavirus pandemic, with the Fed slashing interest rates to near zero, pledging hundreds of billions of dollars in asset purchases and backstopping foreign authorities with the offer of cheap dollar financing. [L1N2B80FD]

FILE PHOTO: U.S. Federal Reserve Chairman Jerome Powell arrives to speak to reporters after the Federal Reserve cut interest rates in an emergency move designed to shield the world’s largest economy from the impact of the coronavirus, in Washington, U.S., March 3, 2020. REUTERS/Kevin Lamarque/File Photo

Here are some highlights from Fed Chair Jerome Powell’s emergency press conference:

ON THE U.S. ECONOMIC OUTLOOK

“It’s very hard to say how big the effects will be or how long they will last. That’s going to depend of course on how widely the virus spreads, which is something that is highly uncertain and I would say, in fact, unknowable.”

ON TODAY’S FED ACTIONS

“We thought it was quite important for us to take strong measures to support proper market functioning in important markets.”

ON NEGATIVE INTEREST RATES

“We do not see negative policy rates as likely to be an appropriate policy response here in the United States.”

ON LIMITS OF MONETARY POLICY

“We don’t have the tools to reach individuals and particularly small businesses and other businesses and people who may be out of work… we don’t have those tools… this is a multifaceted problem and it requires answers from different parts of the government and society… I think fiscal policy is a way to direct relief to particular populations and groups… we do think fiscal responses are critical.”

ON ITS ASSET PURCHASE PROGRAM

“There’s no monthly cap, no weekly cap… that language is open ended and it’s meant to send a signal to the market that we’re not going to be bound by, for example, $60 billion a month or anything like that. We’re going to go in strong starting tomorrow.”

ON IF HE HAS TAKEN CORONAVIRUS TEST

“I feel fine, I feel very well, so there’s no reason for me to be tested.”

ON FED REQUESTING CHANGES TO ITS POWERS FROM CONGRESS

“We have not at all made a decision at all to request further tools or authorities from Congress. We have not made that decision, that’s not something we’re actively considering right now.”

ON FED’S DECISION NOT TO RELEASE ECONOMIC FORECASTS

“A number of FOMC participants had already reached out to make the point, the economic outlook is  evolving on a daily basis and it really is depending heavily on the spread of the virus and the measures taken to affect it and how long that goes on and that’s just not something that is knowable. Actually writing down a forecast in that circumstance didn’t seem to be useful and in fact could have been more of an obstacle to clear communications than a help.”