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The Federal Reserve could possibly opt out for rate cuts if the coronavirus outbreak intensifies and turns into a global pandemic, St. Louis Federal Reserve bank president James Bullard (non-voter) said on Friday but added it was not the base case scenario.

“The base case is that the Fed policy is in a good place, with insurance cuts from last year helping buffer against shocks,” Bullard further explained. “The economic impacts of the outbreak will be noticeable in China but will be on a smaller scale elsewhere with temporary disruptions to global supply chains.

USD reaction

Following these comments, the US Dollar Index stays in the positive territory near the 98.50 mark.