Good day. Global markets are in positive territory after the Fed threw another kitchen sink at credit markets yesterday. But a rescue package totaling at least $1.6 trillion stalled in the Senate for a second day. Meanwhile, regional Fed leaders Neel Kashkari and James Bullard offered Washington advice on how to help the economic casualties of the coronavirus pandemic. Programs to help workers and small businesses should err on the side of generosity, Mr. Kashkari said. Bullard said unemployment insurance should replace close to or 100% of lost wages.

Now on to today’s news and analysis.

Fed Chairman Jerome Powell’s whatever-it-takes moment arrived Monday as the central bank signaled it would do practically anything—extending loans to big and small businesses and purchasing unlimited amounts of government debt—to help the U.S. economy in a race against time by unveiling a new generation of lending facilities to prevent a liquidity crunch from turning into a solvency crisis for American businesses.

Meanwhile, Federal Reserve Bank of St. Louis leader James Bullard said U.S. economic activity may need to fall by half to protect Americans from coronavirus risks and recommended elected officials declare a “National Pandemic Adjustment Period” to allow the government to pursue special support efforts.

If the repo market, where firms borrow and lend cash and securities to one another to finance trading and other needs, wasn’t busted before, it may be now. That all but ensures the Federal Reserve’s involvement in it for a long time to come. Read More. 

• Trump Considers Easing Distancing Guidelines to Boost Economy
• As Economic Toll Mounts, U.S. Ponders Trade-Offs

• Grocers Stopped Stockpiling Food. Then Came Coronavirus.

Mortgage companies are bracing for a severe cash crunch when Americans who lose jobs and income because of the coronavirus pandemic stop making payments on their home loans. The companies, such as Quicken Loans and Mr. Cooper Group, expect a wave of missed payments from borrowers as early as next month that will force them to come up with tens of billions of dollars on short notice.

Kenya's central bank cut its benchmark lending rate from 8.25% to 7.25%, marking the third cut since late last year and bringing the rate to its lowest level in nearly a decade due to a dire local and global economic outlook caused by the coronavirus pandemic. (Dow Jones Newswires)

Financially strapped apartment landlords with government-backed mortgages can avoid foreclosure if they don’t evict tenants, the Federal Housing Finance Agency said Monday. The order applies to the Fannie Mae and Freddie Mac mortgage companies, which will extend mortgage forbearance to any landlord “negatively affected by the coronavirus national emergency,” according to the agency.

Time N/A: National Bank of Hungary releases policy statement
5:30 a.m.: Bank of England releases Financial Policy Committee summary
10:00 a.m.: U.S. Commerce Department releases February new-home sales
7:50 p.m.: Bank of Japan releases Jan. 20-21 meeting minutes

Time N/A: Bank of Thailand releases policy statement
8:30 a.m.: U.S. Commerce Department releases February durable-goods data

With the Covid-19 crisis driving Western nations to embrace government spending, investors should now focus on whether fiscal policy can match the best attributes of central banks: speed and open-endedness, Jon Sindreu writes at The Wall Street Journal.

• The European Commission said its measure of eurozone consumer sentiment slumped to minus 11.6 in early March from minus 6.6 in February, the largest one-month fall on record, as governments announced stringent restrictions on movement and social interaction.
• Europe saw a record fall in business activity during March as government measures and behavioral changes designed to contain the novel coronavirus intensified, while Japan saw sharp falls that similarly hit service providers hardest.
• The CBA Flash Australia Composite PMI fell to 40.7 this month from 49 in February as the country's service sector was severely affected by new business from abroad contracting substantially amid travel restrictions for tourists. (Dow Jones Newswires)
• Australia’s government announced a second economic stimulus package worth 66 billion Australian dollars, or $38.2 billion, to mitigate the impact of the coronavirus pandemic, bringing total measures to the equivalent of 9.7% of the country’s gross domestic product. (DJN)
• The International Monetary Fund expects a global recession this year that may be worse than during the global financial crisis, Managing Director Kristalina Georgieva said, adding that 80 countries have requested emergency help from the lender of last resort. (DJN)
• The Bank of Thailand is expected to cut its benchmark one-day repurchase rate by 25 basis points to a new record low of 0.5% on Wednesday, three of five economists polled by WSJ said. (DJN)

This newsletter is compiled by James Christie in San Francisco and Ed Ballard in London.

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