March 15, 2020
Jerome H. Powell
March 15, 2020 FOMC Press Conference
- The chair said the second quarter is likely to be weak, with output possibly declining from the first quarter.
- He stated that negative policy rates are not seen as likely to be an appropriate policy response in the United States.
- He acknowledged the Fed lacks tools to directly reach individuals and small businesses facing income drops, calling fiscal policy critical for such relief.
- He said the Fed does not have legal authority to buy securities outside Treasuries and agency mortgage-backed securities and is not seeking it.
- He noted the discount window rate was reduced by 1½ percentage points to ¼ percent, with loans available for up to 90 days.
From the opening statement
Press conference
CHAIR POWELL. Good evening, everyone. Today the Federal Reserve took a number of actions to support American families and business and the economy overall and to promote the flow of credit as we weather disruptions caused by the coronavirus. The virus is having a profound effect on people across the United States and around the world. On behalf of my colleagues at the Federal Reserve, our first concern is for those who’ve been harmed.
Families, businesses, schools, organizations, and governments at all levels are taking steps to protect people’s health. These measures, which are essential for containing the outbreak, will nonetheless understandably take a toll on economic activity in the near term. While the primary response to this challenge will come from our health-care providers and policy experts, economic policymakers must do what we can to ease hardship caused by the disruptions to the economy and to support a swift return to normal once they have passed.
The Federal Reserve ’s role is guided by our mandate from Congress to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system. Today we reduced the target range for our policy interest rate by 1 percentage point, bringing it close to zero, and said that we expect to maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals. In addition, we took other actions to support the flow of credit to households and businesses.