Top financial and economic officials from the Group of Seven (G-7) on Tuesday said that they are “ready to take actions” to fight the economic damage of the coronavirus but did not announce specific plans to bolster global growth.
In a joint statement following a Tuesday morning call, G-7 finance ministers and central bank governors said they are “closely monitoring the spread” of the coronavirus and “reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.”
The G-7 consists of the U.S., Canada, France, Germany, Italy, Japan and the United Kingdom. Tuesday’s call was led by U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, according to the Treasury Department.
Mnuchin is expected to field questions about the Trump administration’s response to the coronavirus during a Tuesday appearance before the House Ways and Means Committee.
Economic officials and central bankers around the world are facing pressure from financial markets to restore investor confidence through rate cuts and stimulus. Global stocks had steadily plummeted until a Monday rally, while U.S. bond yields plunged through record lows.
The full economic toll of the coronavirus is far from certain, but economists fear it could plunge weak European and Asian economies into recessions. While the U.S. economy remains far stronger than those of its foreign counterparts, a prolonged coronavirus outbreak could also derail American economic growth.
The G-7 officials did not announce a course of action Tuesday, but they pledged to continue “strengthening efforts to expand health services” and would consider using “fiscal measures where appropriate.”
The officials also said that global central banks “will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system,” opening the door to interest rate cuts.
The Fed is widely expected to cut interest rates by its upcoming policy meeting on March 17 and 18 by up to 50 basis points. Powell has also faced increasing pressure to cut interest rates from President Trump, who has long blasted the Fed for keeping borrowing costs above the level seen in much weaker global economies.
“Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!” Trump said in a series of tweets shortly after 1:30 a.m. on Tuesday.