February 27, 2020 / 6:28 PM / a month ago

Fed's Evans: too early to cut growth outlook or rates on coronavirus

Chicago Federal Reserve Bank President Charles Evans looks on during the Global Interdependence Center Members Delegation Event in Mexico City, Mexico, February 27, 2020. REUTERS/Edgard Garrido

MEXICO CITY (Reuters) - Chicago Federal Reserve Bank President Charles Evans said on Thursday it was too soon to say if the U.S. growth forecast would be lowered due to the coronavirus epidemic, let alone if the U.S. central bank would need to cut rates. .

“I think it would be premature until we have more data and have an idea what the forecast is to think about monetary policy action,” Evans told reporters at an event in Mexico City. “But we’re monitoring it very closely and if we see something that does require adjustment I’m confident that we will give that all the consideration that it needs.”

Traders in financial markets are betting on an interest-rate cut. On Thursday they were pricing in about a 70% chance of the Fed starting to cut rates as soon as next month and trimming an extraordinary three-fourths of a percentage point by mid-year, according to CME Group’s FedWatch.

Evans said he had not yet seen data showing an impact on trade flows between the United States and China, and that lending appeared to be taking place at reasonable levels.

“I think our monetary policy is pretty well positioned for the risks that we have seen coming, or we’ve worried about, downside risks,” Evans said. “I would say that this was not on my radar screen when we made three rate cuts last year. But I certainly feel better about the positioning of policy with any type of additional risks we might be facing.

Reporting by Anthony Esposito, Writing by Daina Beth Solomon; Editing by Chizu Nomiyama

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