**US Fed Staffers See June Rate Hike as ‘Less Compelling’ on Virus Concern**
**Federal Reserve staff members now see a June interest-rate increase as “less compelling” in light of the spreading coronavirus that threatens to derail the US economy, according to minutes from the central bank’s latest meeting.
While the Fed left rates unchanged last week, the minutes showed that a rate hike in June “was less compelling than it would have been had the virus not emerged.”
The minutes also showed that the Fed is closely monitoring the impact of the virus on the economy and is prepared to take action if necessary.
“The staff judged that the effects of the virus on the economy would likely be significant but likely to be temporary,” the minutes said.
“The staff also judged that the risks to the outlook remained roughly balanced, with downside risks related to the virus being offset by upside risks from fiscal policy and other factors.”
The Fed’s next meeting is scheduled for March 17-18, and the central bank is widely expected to leave rates unchanged at that meeting.
However, the Fed is likely to be closely monitoring the impact of the virus on the economy and could take action if necessary.
“The Fed is in a wait-and-see mode,” said Mark Zandi, chief economist at Moody’s Analytics.
“They are going to wait and see how the virus plays out and how the economy reacts to it.”
Zandi said that the Fed is likely to cut rates if the virus causes a significant slowdown in the economy.
“If the virus causes a recession, the Fed will cut rates,” Zandi said.
“They are not going to let the economy fall into a recession.”
The Fed’s decision to leave rates unchanged last week was in line with expectations, but the minutes showed that the central bank is becoming increasingly concerned about the impact of the virus on the economy.
The Fed is likely to be closely monitoring the impact of the virus on the economy and could take action if necessary.
“The Fed is in a wait-and-see mode,” said Zandi.
“They are going to wait and see how the virus plays out and how the economy reacts to it.”
Zandi said that the Fed is likely to cut rates if the virus causes a significant slowdown in the economy.
“If the virus causes a recession, the Fed will cut rates,” Zandi said.
“They are not going to let the economy fall into a recession.”.
