Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Jerome Powell and President Trump in 2017. Photo: Saul Loeb/AFP via Getty Images

Now that the Federal Reserve has fired its monetary policy bazooka — announcing Sunday the second emergency interest rate cut in as many weeks, this one taking rates effectively to zero — expect the drumbeat for fiscal stimulus to pick up, as more economists pound the table for government action.

What's happening: On Monday, Sen. Mitt Romney (R-Utah) joined a growing chorus of liberal and conservative economists are lining up behind a proposal published in the Wall Street Journal by Harvard professor Jason Furman, who chaired the Council of Economic Advisers (CEA) under President Obama, that calls for direct government payments of $1,000 to every American adult.

  • Romney said that the idea would "help ensure families and workers can meet their short-term obligations and increase spending in the economy."

What it means: Furman proposes Congress pass a "one-time payment of $1,000 to every adult who is a U.S. citizen or a taxpaying U.S. resident, and $500 to every child who meets the same criteria."

  • He adds that the law "should also specify that the payments would continue in 2021 and beyond if the unemployment rate rises to 5.5% and remains there or higher. Hopefully this will not happen, but if it does, the money will be needed."
  • "The comprehensive and dynamic response should also include extensions of unemployment insurance and increased Medicaid matching for states. These would be passed pre-emptively, so that they could trigger automatically in states where unemployment rates rise."

The proposal for direct payments to households also has been backed by noted conservatives Michael R. Strain and Scott Gottlieb of the right-leaning American Enterprise Institute, who advocate for direct payments that are "temporary and only for states experiencing severe outbreaks."

Why it matters: Market watchers of all stripes agree that the Fed's tools alone are insufficient to counter the damage likely to be done to the U.S. economy from the coronavirus outbreak and shutdown of businesses that has already begun.

  • Fed chair Jerome Powell admitted as much during his press conference Sunday, saying,"We don’t have the tools to reach individuals and particularly small businesses and other businesses and people who may be out of work."
  • "I think fiscal policy is a way to direct relief to particular populations and groups ... we do think fiscal responses are critical."

The bottom line: "The issue is not aggregate demand but social insurance," N. Gregory Mankiw, a Harvard economics professor who served as CEA chair under George W. Bush, told Axios in an email Thursday.

  • "You need to help people get over a time when working is impossible for some occupations, and to discourage people who have symptoms from leaving their homes just to get a paycheck. $1000 per person sounds about right."
  • (Mankiw expanded on these thoughts after "several reporters emailed" him in a blog post on Friday.)

But, but, but: Many are worried that Congress and the White House have become too dysfunctional to take bold action and are expecting to see the Fed forced to push forward with helicopter money — effectively the same policy, but instituted by the unelected U.S. central bank rather than the country's politicians.

Former Fed senior economist Claudia Sahm warns that using helicopter money could be dangerous, and is seen as "the nuclear option" inside the Fed.

  • "The political ramifications of the Fed essentially printing money and giving it to people — there are ways to do it, but the problem is if the Fed does this and Congress still has not passed anything ... that would mean the Fed has stepped in and done something that Congress didn’t want to do," she tells Axios.
  • "If they did helicopter money without congressional approval, Congress could, and rightly so, end the Fed."
  • "I really don’t want Congress or the administration to think that’s a real option," she adds. "It’s un-American in the sense that we have a democracy and elected officials. We shouldn’t be using that."

Go deeper: Why the Fed action matters

Go deeper

Ro Khanna accuses Biden of quitting Middle East

Rep. Ro Khanna. Photo: Cody Glenn/Sportsfile for Web Summit via Getty Images

An outspoken progressive Democrat is wary of President Biden’s approach to the Middle East, arguing it’s like “conceding defeat of the aspiration” to win a Nobel Peace Prize.

Why it matters: A number of members of Biden’s own party dislike his Middle East strategy, as his administration signals the region is no longer the priority it was for President Obama and his predecessors.

Democrats eye reconciliation for immigration

Photo: Chip Somodevilla/Getty Images

Comprehensive immigration reform is a pipe dream, but some Senate Democrats are hoping to tie key immigration provisions to the next big reconciliation push.

Why it matters: Immigration is one of the most controversial and partisan issues in U.S. politics, which is why the budget reconciliation process — which allows for bills to pass the Senate with a simple majority rather than the usual 60 votes — is so attractive.

3 hours ago - Politics & Policy

Scoop: Biden meeting Quad amid own pivot toward Asia

Artists paint portraits of President Biden and Vice President Kamala Harris in Mumbai, India. Photo: Anshuman Poyrekar/Hindustan Times via Getty Images

President Biden plans to meet this month with the leaders of Japan, Australia and India in a virtual summit of the so-called Quad, according to people familiar with the matter.

Why it matters: By putting a Quad meeting on the president’s schedule, the White House is signaling the importance of partnerships and alliances to counter China’s growing influence in the Indo-Pacific region.