We have consistently maintained that the coronavirus outbreak, though scary and fatal for nearly 2900 so far out of 84,000 cases according to John Hopkins Center for Systems Science and Engineering, should not create panic among investors for the long term. There have been lots of nasty headlines generated and the stock market has taken a surprising 12.8% dive from all-time highs into correction territory as a result, but history does not support what we’ve seen so far as a serious pandemic.

Nevertheless, no one can be 100% sure of this, not even your faithful scribes in these pages. And already the debate has begun, at least in the media, about what the Federal Reserve can or should do about this virus and what effect it might have on global economic activity.

The markets have spoken. While the stock market is down big, the bond market is up big, as investors fly to safety. And the CME Fed futures market has already decided—for now. I’ve noted in previous issues that the Fed futures were slowly but surely moving forward the probability of a Fed cut to the Fed Funds rate. A while back it was expected to be December. A few months back it was July. Last week it went to April early on and now strong expectations for at least one rate cut at the next meeting, March 17-18...

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