Fed Official: If Coronavirus Makes ‘Significant Impact’ on US Economy, Interest Rate Cuts May Be in Order

Patrick Harker, President and CEO of the Federal Reserve Bank of Philadelphia, addresses an audience at the Philadelphia Fed in 2017. Courtesy of the Federal Reserve Bank of Philadelphia

Philadelphia Federal Reserve Bank President Patrick Harker said that if the coronavirus-related economic malaise now hurting China spills over and deals the U.S. economy a material blow, the Fed may be forced to drop interest rates to contain the fallout.

“It’s too early to say what impact the spread of the coronavirus will have on the global economy, but the negative effects on the Chinese economy and international travel are something to watch,” Harker said in a speech at the University of Delaware in Newark on Monday.