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Economic data will show coronavirus impact 'fairly soon' -Powell

Credit: Reuters Studio
Published on February 12, 2020 - Duration: 02:00s

Economic data will show coronavirus impact 'fairly soon' -Powell

The Federal Reserve will be begin to see the impact of the coronavirus outbreak show up in economic data 'fairly soon,' Chairman Jerome Powell told lawmakers on Wednesday.

Conway G.

Gittens reports.

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Economic data will show coronavirus impact 'fairly soon' -Powell

Federal Reserve Chairman Jerome Powell told lawmakers Wednesday he is closely monitoring the coronavirus outbreak, which has paralyzed China - the world's second biggest economy.

While he admits it is still too early to tell if there will be any long-lasting damage, he expects to start seeing clues of any fallout in the near future.

SOUNDBITE (ENGLISH) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "The real question for the Fed is: what is the likely effect for the U.S. economy?

We will begin to see that in economic data fairly soon and it is too uncertain to even speculate about what the level of that will be and whether it will be persistent or whether it will lead to a material change in the outlook.

But we do expect there will be some effects.

Effects should be substantial in China.

Important but maybe less substantial for their trading partners and we'll be looking at the economic data." On Capitol Hill for a second day to deliver his twice-a-year economic update, Powell told a Senate panel he's watching different parts of the economy for any possible impact, starting with U.S. factory floors that rely on parts from Chinese factories temporarily shut because of the outbreak.

SOUNDBITE (ENGLISH) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "Supply chains is an important issue.

We import a lot of intermediate goods from China and final goods too and that will be an issue.

It will also be - our own exports there, of course will be suppressed during this period.

We won't get as much Chinese tourism and the other channel I would mention is financial markets, which can create their own transmission into the economy - to the extent there are really strong reactions in financial markets, so we'll be looking at all of that." But any slowdown from the coronavirus outbreak is just a risk at this point.

With unemployment at a 50-year low, wages up, and hiring on the rise - Powell gave an upbeat outlook for the U.S. economy overall and told senators he saw nothing to suggest the current economic expansion couldn't continue.

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