'Fed Makes Emergency Rate Cut, but Markets Continue Tumbling' diff viewer (14/15)

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Fed Makes Emergency Rate Cut, but Markets Continue Tumbling	Fed Makes Emergency Rate Cut, but Markets Continue Tumbling
2020-03-20 23:22:15 UTC	2020-07-05 05:16:09 UTC (4 months later)
In an extraordinary attempt to contain the coronavirus’s economic fallout, the Federal Reserve slashed interest rates on Tuesday as policymakers unanimously approved their biggest one-time cut — and first emergency rate move — since the depths of the 2008 financial crisis.	In an extraordinary attempt to contain the coronavirus’s economic fallout, the Federal Reserve slashed interest rates on Tuesday as policymakers unanimously approved their biggest one-time cut — and first emergency rate move — since the depths of the 2008 financial crisis.
Stocks in the United States rallied for about 15 minutes after the rate cut, but worries about the Fed’s impotence in the face of economic risks from the coronavirus quickly fueled a market sell-off. By late Tuesday, stocks were sharply lower and bond yields had plummeted to previously unthinkable lows as investors sought a safe place to park their money.	Stocks in the United States rallied for about 15 minutes after the rate cut, but worries about the Fed’s impotence in the face of economic risks from the coronavirus quickly fueled a market sell-off. By late Tuesday, stocks were sharply lower and bond yields had plummeted to previously unthinkable lows as investors sought a safe place to park their money.
The S&P 500 fell about 2.8 percent, undoing some of Monday’s 4.6 percent surge. The yield on 10-year Treasury notes dipped below 1 percent.	The S&P 500 fell about 2.8 percent, undoing some of Monday’s 4.6 percent surge. The yield on 10-year Treasury notes dipped below 1 percent.
Interest rates are now set in a 1 percent to 1.25 percent range, and Jerome H. Powell, the Fed chair, signaled that further moves were possible. “The virus and the measures that are being taken to contain it will surely weigh on economic activity, both here and abroad, for some time,” Mr. Powell said at a news conference, adding the Fed was “prepared to use our tools and act appropriately, depending on the flow of events.”	Interest rates are now set in a 1 percent to 1.25 percent range, and Jerome H. Powell, the Fed chair, signaled that further moves were possible. “The virus and the measures that are being taken to contain it will surely weigh on economic activity, both here and abroad, for some time,” Mr. Powell said at a news conference, adding the Fed was “prepared to use our tools and act appropriately, depending on the flow of events.”
But the market’s negative reaction may reflect a recognition that cutting interest rates or engaging in other types of fiscal stimulus will do little to contain the virus that has sickened more than 90,000 people, with major outbreaks taking hold in South Korea, Japan, Iran and Italy.	But the market’s negative reaction may reflect a recognition that cutting interest rates or engaging in other types of fiscal stimulus will do little to contain the virus that has sickened more than 90,000 people, with major outbreaks taking hold in South Korea, Japan, Iran and Italy.
More than 100 people are infected in the United States, with new cases emerging in some big metro areas, including Fulton County, Ga.; Cook County, Ill.; San Mateo County, Calif.; Westchester County, N.Y.; and Maricopa County, Ariz. Washington State reported another fatality from the coronavirus on Tuesday, raising the U.S. death toll to nine.	More than 100 people are infected in the United States, with new cases emerging in some big metro areas, including Fulton County, Ga.; Cook County, Ill.; San Mateo County, Calif.; Westchester County, N.Y.; and Maricopa County, Ariz. Washington State reported another fatality from the coronavirus on Tuesday, raising the U.S. death toll to nine.
While cutting rates can bolster confidence and help to keep borrowing cheap, it cannot prevent disease from spreading or help companies deal with delayed orders or sick workers.	While cutting rates can bolster confidence and help to keep borrowing cheap, it cannot prevent disease from spreading or help companies deal with delayed orders or sick workers.
“We do recognize that a rate cut cannot reduce the rate of infection, it won’t fix a broken supply chain,” Mr. Powell said. “We get that — we don’t think we have all the answers.”	“We do recognize that a rate cut cannot reduce the rate of infection, it won’t fix a broken supply chain,” Mr. Powell said. “We get that — we don’t think we have all the answers.”
If anything, containing the longer-term economic fallout may necessitate preventive actions that will weigh on near-term economic growth, like restricting air travel, closing movie theaters, shuttering factories and quarantining workers. China, the initial source of the outbreak, has engaged in those types of restrictions, hurting its economy temporarily but enabling it to slow the virus’s spread.	If anything, containing the longer-term economic fallout may necessitate preventive actions that will weigh on near-term economic growth, like restricting air travel, closing movie theaters, shuttering factories and quarantining workers. China, the initial source of the outbreak, has engaged in those types of restrictions, hurting its economy temporarily but enabling it to slow the virus’s spread.
Anthony S. Fauci, the director of the Centers for Disease Control and Prevention, called China’s measures “rather draconian” on Tuesday at a news conference but acknowledged that they had slowed the number of virus cases. “They have taken social distancing to its farthest extreme,” he said.	Anthony S. Fauci, the director of the Centers for Disease Control and Prevention, called China’s measures “rather draconian” on Tuesday at a news conference but acknowledged that they had slowed the number of virus cases. “They have taken social distancing to its farthest extreme,” he said.
Many economists predict that the United States could face a significant slowdown — or even a recession — if efforts to contain an outbreak here fail.	Many economists predict that the United States could face a significant slowdown — or even a recession — if efforts to contain an outbreak here fail.
Neil Dutta, the head of economic research at Renaissance Macro Research, wrote in a note after the announcement that “the Fed’s tools are imperfect and not adequate to deal with a public health crisis.” He added that “the panic needs to come from the opposite of 17th Street” — which is where the White House is.	Neil Dutta, the head of economic research at Renaissance Macro Research, wrote in a note after the announcement that “the Fed’s tools are imperfect and not adequate to deal with a public health crisis.” He added that “the panic needs to come from the opposite of 17th Street” — which is where the White House is.
President Trump said on Tuesday that he might further tighten limits on international travel in hopes of blocking the arrival of more visitors infected by the coronavirus, but he ruled out for now any restrictions on travel within the United States.	President Trump said on Tuesday that he might further tighten limits on international travel in hopes of blocking the arrival of more visitors infected by the coronavirus, but he ruled out for now any restrictions on travel within the United States.
“We’re not looking at that at all,” Mr. Trump said. “But we’re looking at other countries and we’re being very stringent,” he told reporters before boarding his Marine One helicopter to fly to the National Institutes of Health for a visit.	“We’re not looking at that at all,” Mr. Trump said. “But we’re looking at other countries and we’re being very stringent,” he told reporters before boarding his Marine One helicopter to fly to the National Institutes of Health for a visit.
Vice President Mike Pence said the C.D.C. would lift all restrictions on testing for the coronavirus and would release new guidelines to fast-track testing for people who fear they have it, even if they are displaying only mild symptoms. But Mr. Pence said the federal government did not intend to dictate school or office closings, saying that “these decisions are best made at the state and local level.”	Vice President Mike Pence said the C.D.C. would lift all restrictions on testing for the coronavirus and would release new guidelines to fast-track testing for people who fear they have it, even if they are displaying only mild symptoms. But Mr. Pence said the federal government did not intend to dictate school or office closings, saying that “these decisions are best made at the state and local level.”
The World Bank, in an attempt to help countries deal with the health and economic effects of the outbreak, said it would make $12 billion worth of financing available. David Malpass, the World Bank president, said the money would be used to strengthen health systems, improve access to health services and enhance disease surveillance, particularly in poorer countries.	The World Bank, in an attempt to help countries deal with the health and economic effects of the outbreak, said it would make $12 billion worth of financing available. David Malpass, the World Bank president, said the money would be used to strengthen health systems, improve access to health services and enhance disease surveillance, particularly in poorer countries.
Investors still expect the Fed to do more, and are anticipating another quarter-point cut at the central bank’s meeting on March 18, potentially followed by another move in April. But the central bank is running low on room to cut rates to avert a significant downturn if things worsen, which could be fueling market jitters. Going into the last recession, from 2007 to 2009, the Fed cut rates from above 5 percent. Now it will have just four quarter-point moves left at its disposal.	Investors still expect the Fed to do more, and are anticipating another quarter-point cut at the central bank’s meeting on March 18, potentially followed by another move in April. But the central bank is running low on room to cut rates to avert a significant downturn if things worsen, which could be fueling market jitters. Going into the last recession, from 2007 to 2009, the Fed cut rates from above 5 percent. Now it will have just four quarter-point moves left at its disposal.
“Maybe there’s a stronger sense that we’re closer to being out of ammo. This is a real shock, and what is a rate cut going to do?” said Julia Coronado, a founder of the research firm MacroPolicy Perspectives. “We don’t know where it is, who has it, or how far it is going to spread.”	“Maybe there’s a stronger sense that we’re closer to being out of ammo. This is a real shock, and what is a rate cut going to do?” said Julia Coronado, a founder of the research firm MacroPolicy Perspectives. “We don’t know where it is, who has it, or how far it is going to spread.”
Other economists speculated that markets might have seen the action as a signal that economic fundamentals are crumbling.	Other economists speculated that markets might have seen the action as a signal that economic fundamentals are crumbling.
“This could be seen as a panic move,” Ryan Sweet at Moody’s Analytics said in a note, calling the Fed’s decision to move in between scheduled meetings “risky.”	“This could be seen as a panic move,” Ryan Sweet at Moody’s Analytics said in a note, calling the Fed’s decision to move in between scheduled meetings “risky.”
Emergency rate cuts are not without precedent. The Fed’s move on Tuesday echoed a 50-basis-point rate cut it made in October 2008 as markets melted down after the collapse of Lehman Brothers, and another it made earlier that year.	Emergency rate cuts are not without precedent. The Fed’s move on Tuesday echoed a 50-basis-point rate cut it made in October 2008 as markets melted down after the collapse of Lehman Brothers, and another it made earlier that year.
But this time, the central bank moved pre-emptively — trying to get ahead of an economic problem, rather than waiting until damage was more fully realized. Unemployment in the United States remains at a 50-year low, and most economic indicators do not yet reflect a virus fallout.	But this time, the central bank moved pre-emptively — trying to get ahead of an economic problem, rather than waiting until damage was more fully realized. Unemployment in the United States remains at a 50-year low, and most economic indicators do not yet reflect a virus fallout.
As recently as late January, the Fed signaled it expected to hold rates steady, with no plans to raise or lower borrowing costs after ushering in three cuts in 2019. But officials at its last policy meeting were already growing concerned about the virus’s potential effects, and in February, Mr. Powell warned that China’s struggles with the virus could pose broader economic risks.	As recently as late January, the Fed signaled it expected to hold rates steady, with no plans to raise or lower borrowing costs after ushering in three cuts in 2019. But officials at its last policy meeting were already growing concerned about the virus’s potential effects, and in February, Mr. Powell warned that China’s struggles with the virus could pose broader economic risks.
The Fed’s move came after central banks in Australia and Malaysia lowered borrowing costs early Tuesday and after a joint statement from the leaders of the Group of 7 — which includes Britain, Canada, France, Germany, Italy, Japan and the United States — pledged global coordination and cooperation in containing fallout from the coronavirus.	The Fed’s move came after central banks in Australia and Malaysia lowered borrowing costs early Tuesday and after a joint statement from the leaders of the Group of 7 — which includes Britain, Canada, France, Germany, Italy, Japan and the United States — pledged global coordination and cooperation in containing fallout from the coronavirus.
Mr. Trump, who has played down the economic effect of the virus, has been urging the Fed to cut rates to better compete with other countries that have low or negative borrowing costs. The Fed’s half-point cut did little to assuage his complaints.	Mr. Trump, who has played down the economic effect of the virus, has been urging the Fed to cut rates to better compete with other countries that have low or negative borrowing costs. The Fed’s half-point cut did little to assuage his complaints.
“Finally. Do it more. Do it a little bit more,” the president said of the rate cut. “We’re paying more than other countries; we should be paying less than everybody else. We have the dollar. We have the strength. We have the greatest country on Earth.”	“Finally. Do it more. Do it a little bit more,” the president said of the rate cut. “We’re paying more than other countries; we should be paying less than everybody else. We have the dollar. We have the strength. We have the greatest country on Earth.”
Asked if political pressure fueled the cut, Mr. Powell said that in making decisions, he and his colleagues were “never going to consider any political considerations whatsoever.”	Asked if political pressure fueled the cut, Mr. Powell said that in making decisions, he and his colleagues were “never going to consider any political considerations whatsoever.”
	Updated June 30, 2020
	Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
	Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
	A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
	The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
	The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
	So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
	Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
	A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
	The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
	If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)