TAIPEI, Taiwan--(BUSINESS WIRE)--Last week, the Chairman of the US Federal Reserve, Jerome Powell, stated that the US economy is in a good place. He went on to dismiss recent concerns over the impact of the coronavirus and the possibility of a recession. Irvine Humphries Global analysts say it is too soon to gauge what the fallout will be for the US economy from the rapidly spreading virus that originated in China just a few months ago.
The novel Coronavirus came out of the Chinese city of Wuhan and has claimed the lives of more than 100 people, infecting thousands more. It has taken the already struggling Chinese economy by storm and Irvine Humphries Global analysts have warned that the economic contagion could spread further than just China and its immediate neighbors.
The importance of China’s role in global supply chain was clearly demonstrated last year when the trade war between China and the US caused global trade disruption.
While Fed chair Jerome Powell stated that it was unlikely that the effects of the coronavirus would be cause for policy adjustment, Irvine Humphries Global economists believe it is unwise to underestimate the potential severity of the fallout.
“As we saw last year, China is a major player on the world’s economic stage. As such, anything that affects China’s economic health will likely affect us all,” Said Michael Ruei, Senior Economist at Irvine Humphries Global.
Powell also stated that the US economy was in a strong position due to reduced trade uncertainties. Despite lackluster manufacturing figures and the sluggish global growth climate, the US is seeing strong employment growth and moderate growth. He added that the growth is neither unstable nor unsustainable given the current risk factors.
In light of these views the Fed appears set to maintain interest rates at the current scope of between 1.5% to 1.75%. Irvine Humphries Global economists say it will likely take a significant shift in the current economic outlook to motivate the Fed to adjust its current policy stance.
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