ARLINGTON, Va.—While the U.S. economy saw modest to moderate growth in recent weeks, the Federal Reserve's latest Beige Book data shows the coronavirus was starting to impact some industries, including travel, tourism, and manufacturing.
As these are the sectors most likely to be affected, with NAFCU's Curt Long noting, "Fed contacts signaled broad concern over the potential impact of the coronavirus."
As CUToday.info reported, the Federal Reserve in an emergency move cut interest rates by 50 basis points, to a target range of 1%-1.25%, to address coronavirus’ impact on the economy.
"As markets have settled somewhat this week and a spending bill works its way through Congress, Fed officials are likely to be more data-driven in future rate decisions," said Long, NAFCU's chief economist and vice president of research. "Barring a deterioration in the labor market, or a clear escalation in the impact of the virus, the Federal Open Market Committee will likely hold rates at its next meeting."
The FOMC is scheduled to meet March 17-18. In addition, Congress announced that a deal had been reached to provide $8 billion in emergency funding to fight the virus.
The coronavirus and upcoming presidential election were cited as potential risks by Fed contacts, who expect modest growth in the near term, Long said.
Other Highlights
Other highlights from the newest Beige Book include:
- Consumer spending generally picked up, but growth was uneven across the nation, including mixed reports of auto sales
- Although manufacturing activity expanded in most parts of the country, some supply chain delays were reported as a result of the coronavirus and several districts said that producers feared further disruptions in the coming weeks
- Overall loan growth was flat to up modestly in most districts, though notable exceptions were St. Louis, New York, and Kansas City, where declines were reported