The uncertainty around the global coronavirus pandemic’s duration and severity creates “major downside risks” to the US economy, the Federal Reserve said Wednesday.

The United States is sure to take a hit in the near term as businesses are forced to close and consumers are confined to their homes, the Fed said in the minutes of the March 15 emergency policy meeting, when the central bank slashed the benchmark interest rate to zero.

But while the shutdowns imposed to contain the virus create hardship for businesses and households, they should not have the lasting impact that was seen in the wake of the global financial crisis in 2008, Fed officials said.

Though central bankers worried that the containment efforts would spread to other areas of the country and have a ripple effect on the economy, the meeting was held before the most stringent lockdowns were imposed in most states.

In the final two weeks of March, nearly 10 million people filed for unemployment benefits, and economists expect the jobless rate to hit double digits this month.

But at the time of that emergency meeting – the second unscheduled meeting last month, which was held on a Sunday – officials said, “The unpredictable effects of the coronavirus outbreak were a source of major downside risks to the economic outlook.”

When growth will resume depends “on the containment measures put in place, as well as the success of those measures, and on the responses of other policies, including fiscal policy.”

Since then, Congress has approved three support packages, including a massive US$2.2 trillion rescue measure that puts money into unemployment insurance and emergency lending for small businesses to pay workers.

Despite the severity of the current crisis, members of the Fed’s policy-setting Federal Open Market Committee said the US economy and banking system were on solid footing.

Some officials viewed the pandemic as “not directly comparable with the previous decade’s financial crisis and it need not be followed by negative effects on economic activity as long-lasting as those associated with that crisis.”

Some committee members were reluctant to cut the interest rate by a full point less than two weeks after lowering it a half point, concerned in part about the negative signal that would send about the economic outlook.

But the majority favored a “forceful” response, including the measures the Fed has taken to pump huge amounts of liquidity into the US financial system, to help support businesses facing cash shortages.

They worried about low-income households with “less of a savings buffer” making them “more vulnerable to a downturn in the economy.”