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Fed says it will do everything it can to support economy facing continued public-health crisis
2020-04-29 18:06:19.483 GMT

By Greg Robb, MarketWatch

(MarketWatch) — Central bank says coronavirus pandemic poses risks beyond the
short-term

The Federal Reserve on Wednesday committed itself to use its full range of
tools to help the economy facing considerable risk from the coronavirus
pandemic.

"The ongoing public health crisis will weigh heavily on economic activity,
employment and inflation in the near term, and poses considerable risks to the
economic outlook over the medium term," the Fed said in a statement after
two-day meeting.

The Fed kept its benchmark rate in a range from 0 to 0.25% and repeated it
would hold policy steady until the economy has weathered recent events and "is
on track" to achieve full employment and price stability. That is unchanged
from the March forward guidance.

Fed Chairman Jerome Powell will meet with reporters at 2:30 p.m. Eastern

The economy is reeling as the stay-at-home orders designed to stop the spread
of COVID-19 have brought the economy to a standstill. The service economy
typically can power through a recession but not a quarantine. There are now 26
million Americans who have been laid off over the past five weeks. Economic
activity in the first quarter contracted at a 4.8% annual rate
(www.marketwatch.com/story/gdp-sinks-48-in-the-first-quarter—biggest-drop-since-2008-and-worst-is-yet-to-come-2020-04-29)and
economists expect an even larger drop in the April-June quarter.

(https://twitter.com/Brad_Setser/status/1255484107313819649)

Stocks were trending higher on optimism about a drug manufacturer's
coronavirus treatment. The Dow Jones Industrial Average was up over 500
points.

The yield on the 10-year Treasury note was down slightly to 0.606%. Yields are
down from the 52-week high of 2.552% hit last May.

-Greg Robb; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires