FOMC: Pandemic Continues to Pose ‘Considerable Risk’ to Economic Outlook

The coronavirus pandemic continues to cause economic hardship across the country and poses considerable risk to the economic outlook over the medium term, according to members of the Federal Reserve’s Federal Open Market Committee.

In minutes from the group’s Dec. 15-16 meeting, members noted that the economic recovery so far has been stronger than anticipated—suggesting greater momentum in economic activity than had been previously thought—but viewed the more recent economic indicators as signaling that the pace of recovery had slowed.

Members noted that with the pandemic worsening across the country, the expansion is likely to slow even further in coming months, adding that “nevertheless, the positive vaccine news received over the intermeeting period was viewed as favorable for the medium-term economic outlook.” An upside risk noted by members is the possibility that a release of pent-up demand, spurred by wider-scale vaccinations and easing of social distancing, could boost spending and bring individuals back to the labor force more quickly than currently expected.