Federal Reserve officials unanimously agreed Wednesday to make no change to the nation's benchmark interest rate, defying calls from President Donald Trump to lower rates in order to align with other central banks.
The Federal Open Market Committee announced at the conclusion of its first meeting of 2020 that it would hold rates at the current range of 1.5 percent to 1.75 percent.
Trump, a staunch supporter of negative interest rates, made a last-minute attempt on Tuesday to influence the Fed — an agency that operates outside of any political purview. The president tweeted Tuesday morning that the central bank should "get smart & lower the Rate to make our interest competitive with other Countries which pay much lower even though we are, by far, the high standard."
Trump has repeatedly lambasted the Fed for not lowering rates far enough, even though it cut rates three times last year.
“A virtuous cycle of job creation, low unemployment and sustained consumer spending is supporting the ongoing economic expansion," said Greg McBride, chief financial analyst at Bankrate.com. "Until the Fed sees a risk to that, any further rate cuts are unlikely.”
During a press briefing directly following the meeting, Federal Reserve Chairman Jerome Powell acknowledged concern about the growing threat of China's coronavirus outbreak on the global economy.
"There is likely to be some disruption to activity in China and possibly globally based on the spread of the virus to date and the travel restrictions and business closures that have already been imposed," Powell said. "We are very carefully monitoring the situation... and the potential ramifications for the U.S. economy and for the achievement of our duel mandate.”
Multinational companies such as Starbucks and McDonald's have already warned that the virus will affect their bottom line, and some economists predict China’s GDP will dip by 2 percentage points — a greater impact than the SARS virus in 2003, which wiped $40 billion off the world economy.