A little more than a month ago, when Federal Reserve Chairman Jerome Powell delivered his semiannual report to Congress, the new coronavirus was still an emerging blip on the central bank’s radar.

During his Feb. 11 testimony, Powell reiterated Fed forecasts for 2% growth in gross domestic product and a steady 3.5% unemployment rate this year. Downside risks to the U.S. outlook had risen, he said, but he largely repeated the stance he had outlined on Jan. 29, when the Fed decided to leave interest rates unchanged: Monetary-policy...