Fed’s Zero Debate, BOE Rate Cut, ECB’s 2008 Warning: Eco Day

(Bloomberg) --

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

• As Federal Reserve officials prepare for a monetary policy meeting next week, the mounting economic impact of the coronavirus is turning their academic theorizing into a practical consideration for policy: Should the Fed cut interest rates to zero, and if so, how soon should it act?
  • Bloomberg Economics recommends you watch these three critical trends in the Fed’s virus response
  • U.S. seaports could see a slowdown of as much as 20% in February, March and much of April
• Quarantines, travel restrictions, business closings, and citizens’ voluntary self-protection measures are helpful, but they’ve frozen business while wreaking havoc on people’s routines: You can’t fight the virus without harming the economy
• The Bank of England unveiled stimulus including its first emergency interest-rate cut since the financial crisis, a move coordinated with the government’s fiscal response to prevent the coronavirus outbreak from crippling Britain’s economy
• European Central Bank President Christine Lagarde said Europe risks a major economic shock echoing the global financial crisis unless leaders act urgently on the coronavirus outbreak, and signaled that her institution will take steps as soon as Thursday
  • Italy is ready to spend as much as 25 billion euros on stimulus measures
  • Europe isn’t ready for a full work-from-home lockdown

To contact the reporter on this story: Zoe Schneeweiss in London at zschneeweiss@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Lucy Meakin

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