In the Semiannual Monetary Policy Report to the Congress, Fed Chair Jerome Powell warned that while “some of the uncertainties around trade have diminished recently, but risks to the outlook remain. In particular, Fed is ” closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy.”

But for now, he said, the “current stance of monetary policy will likely remain appropriate”, if incoming information about the economic remains broadly consistent with FOMC’s outlook. He also reiterated that ” If developments emerge that cause a material reassessment of our outlook, we would respond accordingly.”

Powell also pointed out that the current low interest rate environment means “it would be important for fiscal policy to help support the economy if it weakens”. He added, “Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn. A more sustainable federal budget could also support the economy’s growth over the long term.”

Full remarks here.

Philadelphia Fed President Patrick Harker said “my own view right now is that we should hold steady for a while and watch how developments and the data unfold before taking any more action.” He added, “we haven’t quite met our 2% inflation target, but we’re on track to get there.”

Harker also said 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”. He added, “If the situation gets significantly worse and we start to see significant impact on the U.S. economy, then we have to think about accommodating. But I don’t think we’re at that point right now.”

San Francisco Fed President Mary Daly said “policy is in a good place. The economy is in a good place. And barring a material change in the outlook, then I’m comfortable with policy where it’s at, for the foreseeable future.” Her own forecast for inflation is that “it is gradually moving up to target, but my expectation is it wouldn’t achieve something like 2% until somewhere in 2021 as opposed to 2020.”

She added that “we haven’t seen much yet” regarding the impact of China’s coronavirus outbreak. And, “the most important impact would be through confidence, and we haven’t seen that yet either.”

Fed Governor Michelle Bowman said in a speech that the current monetary policy setting “should help support the economic expansion”. Her outlook is for “continued growth at a moderate pace” with unemployment rate “remaining low”. She also saw inflation “gradually rising to the Committee’s 2 percent objective.

On the whole, she added that “the national economic backdrop looks very favorable”.