The Fed has clearly gotten the message being sent from financial markets — "OMFG!!!" — and has acted accordingly.

The state of play: The U.S. central bank is responding to the coronavirus outbreak as if the country is in a crisis, first by declaring an emergency 50 basis point rate cut last week, and on Thursday by announcing $1.5 trillion in injections to the systemically important repo market, on top of already increased funding injections.

  • Congress and the White House are not on the same page and have committed what one former Fed official called "gross negligence" with their response so far.

Why it matters: A recession is starting to shift from possible to overwhelmingly likely with the only question being how bad things will get.

What's happening: "At best the Fed can buy time in the markets and put a floor in the selloff, but a fiscal response is required," Nela Richardson, investment strategist at Edward Jones, tells Axios. "This is a biological event. This problem did not start in the financial markets and the solution won't be found there."

  • Danielle DiMartino Booth, CEO of Quill Intelligence and a former adviser to the Dallas Fed, is expecting "crisis era" policies from the Fed, but Thursday's market selloff — the worst since 1987's historic Black Monday — shows just how limited the central bank is.
  • "The Fed loaded and fired a bazooka and it was not a big enough shock to stanch the bloodletting in the stock and more importantly, credit markets," she tells Axios.

Between the lines: The wave of red on Wall Street — the S&P 500 has fallen 27% from its record high, set just weeks ago — is not an assessment of the economy, Jim Paulsen, chief investment strategist at The Leuthold Group, says.

  • "There is no explanation for why the market is falling 5-10% a day," he tells Axios. "We’re not trading on any kind of reason or sanity, it’s just emotion and panic at the moment."

The bottom line: "The Fed will soon be largely sidelined," Mark Zandi, chief economist at Moody's Analytics, says in an email. "The onus for saving the economy from recession is now squarely on the Trump administration and Congress to provide a large, timely and well thought out fiscal stimulus."

  • Asked how confident he is it would get done, Zandi echoed the response of most economists who have spoken to Axios since the market meltdown began.
  • "Not confident at all. Recession is more than likely."

Go deeper: What the Fed has learned about the coronavirus outbreak

Go deeper

Democratic economist: U.S. should run deficits without debt

Stephanie Kelton. Photo via Stephanie Kelton

America should run deficits without issuing debt. That's the message from Stephanie Kelton, a member of the Democratic Party's economic task force whose new book, The Deficit Myth, argues that money spent by Congress does not need to be "paid for" with taxes or borrowing.

Why it matters: Monetizing the deficit involves simply printing money and handing it out to individuals, businesses, states, or anybody else, without issuing Treasury bonds or raising new taxes. It has been a fringe idea up until now.

Half of the Fortune 100 pledge $2B to fight inequality

Data: Fortune 500, Axios analysis of company statements, get the data; Chart: Andrew Witherspoon, Naema Ahmed/Axios

Since our Monday story on Fortune 100 companies' donations to battle racism and inequality, the tally has risen to more than $2 billion and now includes 50 firms, according to company announcements and an Axios analysis.

Why it matters: Pressure is growing for wealthy corporations to speak out on social issues and to back up those words with sizable funding. More are doing so than ever before and in a much more public way.

Updated Jul 10, 2020 - Health

U.S. coronavirus updates

Data: The COVID Tracking Project; Map: Andrew Witherspoon/Axios

South Carolina restaurants and bars will have to close alcohol sales by 11 p.m., beginning Saturday, under an order issued Friday by Gov. Henry McMaster.

The big picture: The U.S. had another record single-day spike of 63,200 new coronavirus cases from Thursday. COVID-19 cases in South Carolina have increased, with 21,560 cases recorded in the last two weeks.