Fed’s Next Front, U.S. Salary Cuts, EU Stimulus Package: Eco Day

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

• The Federal Reserve’s next front in the battle to support the U.S. economy is to prevent millions of American small businesses from becoming the Achilles heel of the recovery
• Companies across the U.S. are cutting salaries as they fight to survive the coronavirus, upending a key assumption in modern economics and raising another hurdle to rapid recovery
• Jamie Dimon sees “pretty good odds” of a fast economic rebound starting in the third quarter thanks to the U.S. government’s stimulus programs and the strength of the consumer going into the pandemic
• Bank of Canada bought C$21.5 million ($15.6 million) of corporate bonds today for its inaugural purchases in a program to shore up company debt
• Argentina’s primary deficit soared in April as the pandemic’s economic impact forced the government to implement fiscal stimulus while revenues failed to keep up
• The European Union’s executive arm will propose a fiscal stimulus package of as much as 750 billion euros ($823 billion) in an unprecedented push to overcome the deepest recession in living memory
• The euro-area economy is faring worse than hoped, facing a recession as bad as the European Central Bank’s more pessimistic forecasts, according to President Christine Lagarde
  • The ECB is rightly concerned that lingering weakness in demand could create downside risks to inflation over the next few years, according to Bloomberg Economics
• U.K. Chancellor of the Exchequer Rishi Sunak is set to close the government’s coronavirus wage support program to new entrants as he looks for ways to gradually withdraw an unprecedented support package

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