Coronavirus, Italy, China: Your Wednesday Briefing

Coronavirus, Italy, China: Your Wednesday Briefing

(Want to get this briefing by email? Here’s the spoke to Jeanna Smialek, who covers the Federal Reserve from Washington. Below is a condensed version of the conversation.

On Sunday, the Fed slashed interest rates to almost zero. How could that affect us going forward?

The move should help consumers borrow and spend. For example, it should make mortgages cheaper. But at the end of the day, nothing the Fed can do at this point is going to offset the full shock of the coronavirus, because its tools are just not well suited to making up for lost work hours or helping employees who have missed out on paychecks.

Can nations work together to help the global economy rebound?

Central banks do not have the firefighting power that they had going into the 2008 financial crisis. Many central banks, like in Japan and in parts of Europe, already had very low or even negative interest rates. And so they just have less room to act to soften the economic blow.

What matters right now is what happens to the companies getting clobbered in the moment. Is this a short-term blip that is painful but not devastating? Or will this kill companies, thereby having greater repercussions for financial markets, and be much more long-lived in its pain?

If there’s one takeaway for readers on the global economy, what should it be?

It’s been said by every person on the planet at this point, but the single best thing for the global economy is for this virus to be contained. More than any fiscal or monetary package, the public health response here is most important.

That’s it for this briefing. See you next time.

— Mike

Thank you
To Mark Josephson and Eleanor Stanford for the break from the news. You can reach the team at

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