FOMC minutes noted that “all participants viewed the near-term U.S. economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain.” Hence, “almost all members agreed to lower the target range for the federal funds rate to 0 to 1/4 percent.”
“With regard to monetary policy beyond this meeting, these participants judged that it would be appropriate to maintain the target range for the federal funds rate at 0 to ¼ percent until policymakers were confident that the economy had weathered recent events and was on track to achieve the Committee’s maximum employment and price stability goals”, the minutes added.
Separately, Dallas Fed President Robert Kaplan said because of the coronavirus pandemic shock, consumer behavior could be more cautious. “It’s not just the safety concerns… it’s also financial and potentially job insecurity which might cause them to save more and spend less.”
Chicago Fed President Charles Evans warned of a potentially fragile recovery at least until a vaccine is available. Continuing pandemic would risk a “deep and prolonged” downturn. Richmond Fed President Thomas Barkin said “businesses will have to find a way to convince consumers to shop, or eat out, to travel, or go to a concert or a game,” after reopening up.
