Fed’s Emergency Cut, G-7 Lacks Detail, World Bank Aid: Eco Day

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Welcome to Wednesday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• The Fed slashed interest rates by half a percentage point in the first emergency move since 2008. The decision leaves policy makers in Europe and Japan under more pressure to follow suit even though there’s less scope for them to do so. Here’s a brief history of Fed inter-meeting policy shifts
• G-7 finance chiefs said they’re ready to act to shelter their economies from the epidemic, yet did not spell out specific measures. Tom Orlik sees space for monetary and fiscal support, but could fall short of investors expectations
• The World Bank announced a $12 billion immediate support package to help poorer countries confront the health and economic impacts from the spread of coronavirus
• India’s shadow banking sector has improved, with only about four financiers still being a “cause of concern,” central bank Governor Shaktikanta Das said. He said that he’s ready to act to shield the economy from the coronavirus
• The Bank of Canada is poised to follow the U.S. and cut rates, while policy makers in the Gulf have followed the Fed’s move
• Amid a sea of dovish central banks, Sweden’s Riksbank shouldn’t follow its peers and attempt to tackle the fallout of the coronavirus with monetary easing, according to its newest board member
• Bloomberg Economics has developed scenarios for how a $2.7 trillion global pandemic will affect growth
• The coronavirus outbreak may be the final jolt that the world’s biggest companies need to reevaluate how they operate in a globalized economy, the OECD’s chief economist Laurence Boone said
• The IMF and World Bank said they would use a “virtual format” to convene their spring meetings next month, instead of holding the conference in Washington
• Governments struggling to contain the global economic fallout from the outbreak face mounting calls to unleash a major fiscal stimulus that could help cushion the blow
• That might prove tough in Germany with divisions within Chancellor Angela Merkel’s coalition laid bare when top officials disagreed publicly about the need for a stimulus package
• New Zealand’s property market is heating up again and a fresh round of rate cuts in response to the coronavirus could give it another shot in the arm. Over in Austria, the IMF says banks remain too loose with mortgage lending amid a continued rise in property prices
• A growing cohort of elderly and fewer young people is a big factor pushing down inflation rates across the globe and policies need to be adapted in response, ECB policy maker Pablo Hernandez de Cos said

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editors responsible for this story: Paul Jackson at pjackson53@bloomberg.net, Alexandra Veroude

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