US Fed ready to act amid 'evolving' coronavirus risks: Powell

The US Federal Reserve stands ready to take action amid risks posed by the novel coronavirus crisis, the central bank's chair Jerome Powell said Friday, while insisting that the US economy remains in a good position.

In a rare statement released as concerns mount that the virus's worldwide spread could derail global growth, Powell repeated his message of recent weeks, saying, "The fundamentals of the US economy remain strong."

But faced with plunging stock markets, as Wall Street suffers its worst week since the 2008 global financial crisis, he acknowledged that the coronavirus "poses evolving risks to economic activity."

The Fed is "closely monitoring developments and their implications for the economic outlook," Powell said.

"We will use our tools and act as appropriate to support the economy."

While that seems to rule out an emergency interest rate cut over the weekend, which former Fed board member Kevin Warsh had called for, the statement appears likely to reassure investors that the central bank will take action to lower the benchmark borrowing rate as needed.

The major US stock indexes gained a little ground after the statement was released but then retreated.

The Fed cut rates three times last year amid prospects for weakening growth, but since December the message was one of confidence that policymakers had done enough and would only need to act again if there were a "material change" to the outlook.

The Fed's policy-setting committee is set to hold its next meeting on March 17-18, but officials can, and have, made changes in between meetings in dire circumstances.