Fed Vice Chair Richard Clarida reiterated overnight that monetary policy is “in a good place”. “As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate.”

Also, the economy is “in a good place” too. FOMC will “proceed on a meeting-by-meeting basis and will be monitoring the effects of our recent policy actions along with other information bearing on the outlook as we assess the appropriate path of the target range for the federal funds rate.”

He warned that the Wuhan coronavirus is likely to have a “noticeable impact” on China’s economy and “the disruption there could spill over to the rest of the global economy.”. However, it’s “still too soon” to speculate the size or persistence of the spillover effects, or “whether they will lead to a material change in the outlook.” Should that outlook change, he said, “we will respond accordingly.”

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Dallas Fed President Robert Kaplan said it’s “too soon to make a judgment” about how the coronavirus outbreak might relate to monetary policy. “We are still in the heat of this and there’s just a lot of uncertainty”, he added. “In the next three or four weeks some of the uncertainty is going to get cleared up, either for better or worse”.

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