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!
Data: FactSet; Chart: Andrew Witherspoon/Axios

Panic in financial markets has grown to the point that many now believe the only safe asset is the U.S. dollar.

Driving the news: The value of the dollar index rose to near its highest level in 18 years, as banks, traders and businesses made a rush for cash, fearful they could run out as the economy sinks into recession.

  • "We're seeing a global liquidity squeeze, with every major government, business and financial institution poised to borrow unprecedented amounts in the world's deepest funding markets — American markets," Karl Schamotta, chief market strategist at Cambridge Global Payments, tells Axios.

What it means: The worried wave of dollar demand has pushed the greenback to new record highs against high-risk currencies like the Mexican peso and Norwegian krone, its highest since 2003 against the Australian dollar, and highest against the British pound since the 1980s.

  • "Dollar is safe and no one will change that, but the urgent flight to safety is a sign that we have no guidance," Juan Perez, senior FX trader and strategist at Tempus Inc., says, noting a lack of policy action from governments.

Be smart: The run on dollars is happening despite the Federal Reserve providing literally trillions of dollars in liquidity in just the past two weeks and slashing interest rates to zero.

Between the lines: Without a clear idea of whether or not the world's largest economy will pass a major stimulus package or lead a coordinated global rescue effort, confidence is fading fast in spite of the Fed's actions, Schamotta says.

  • "But we're also seeing these moves because of, and not in spite of, the Trump administration's perceived incompetence."
  • "Markets think Trump is failing to heed advice from experts and lessons learned in other countries — focusing on xenophobic characterizations of the problem and small handouts to citizens."

Don't sleep: For the week ending March 17, government money market funds drew $195.5 billion of inflows, according to Crane Data.

  • "This week is by far the largest inflow ever," Crane president and publisher Peter G. Crane tells Axios. "Nothing else even comes close."
  • Prime money market funds saw $66 billion in outflows for the week and on Wednesday night the Fed announced it would backstop the $4 trillion market.

The last word: The zealous demand for dollars was perhaps best illustrated by a report from the Wall Street Journal that "Some branches of U.S. banks and credit unions have run low on cash as customers make big withdrawals," largely in wealthy neighborhoods, sometimes reaching $100,000 or more.

  • In response, the Federal Deposit Insurance Corp. issued a press release Wednesday, reminding Americans in bold letters: "Since 1933, no depositor has ever lost a penny of FDIC-insured funds."

Go deeper

25 mins ago - Axios on HBO

Preview: "Axios on HBO" interviews White House Senior Advisor Cedric Richmond

On the next episode of "Axios on HBO," Axios co-founder Mike Allen interviews White House Senior Advisor Cedric Richmond.

  • Catch the full interview and much more on Sunday, February 28 at 6 pm. ET/PT on all HBO platforms.
2 hours ago - World

Italy tightens COVID restrictions as experts warn of growing prevalence of variants

Health workers prepare vaccine doses in Iseo, Italy. Photo: Stefano Nicoli/NurPhoto via Getty Images

Italy on Saturday announced it was tightening restrictions in five of the country's 20 regions in an effort curb the spread of the coronavirus.

Driving the news: The announcement comes as health experts and scientists warn of the more transmissible coronavirus variants, per Reuters.

3 hours ago - Health

Health care in the New Washington

Illustration: Sarah Grillo/Axios

As America emerges from the pandemic, here's a special Axios AM Deep Dive on the Biden administration's health care agenda.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!