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Fed chairman: Coronavirus 'likely' to hinder economic growth in China

Fed chairman: Coronavirus 'likely' to hinder economic growth in China
© UPI Photo

Federal Reserve Chairman Jerome Powell said Wednesday that the new Chinese coronavirus is a "very serious" issue that may disrupt economic growth in east Asia.

"There is likely to be some disruption to activity in China and possibly globally based on the spread of the virus today and the travel restrictions and business closures that have already been imposed," Powell told reporters Wednesday.

Powell added that while “it’s too early to say” how much damage the illness will unleash, “there will clearly be implications, at least in the near term, for Chinese output, and I guess for some of their closest neighbors, and we'll just have to see what the effect is globally."

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Powell’s comments reflect the depth of concern among policymakers about the economic toll of the novel coronavirus, a lethal respiratory illness that has spread quickly through China. There are more than 6,000 confirmed cases of the coronavirus in China, claiming 132 lives, with at least 80 other cases confirmed outside of China.

The rapid spread of the illness has paralyzed the Asian country, forcing quarantines and travel bans throughout China that have closed businesses and derailed travel. The State Department has warned Americans against nonessential travel to China, and several airlines have curtailed or canceled routes to the populous nation. 

The scramble to contain the coronavirus has weighed heavily on industries and businesses that depend on steady international travel or rely on sales to the quickly growing Chinese middle class. Stocks for airlines, resorts and hotels, travel companies, and major U.S. brands such as Nike and Disney have all taken deep hits throughout the panic.