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Illustration: Aïda Amer/Axios
Economists are rethinking projections about the broader economic consequences of the coronavirus outbreak after a surge of diagnoses and deaths outside Asia and an announcement from a top CDC official that Americans should be prepared for the virus to spread here.
What's happening: The coronavirus quickly went from an also-ran concern to the most talked about issue at the National Association for Business Economics policy conference in Washington, D.C.
What they're saying: "The CDC warning is a little bit alarming ... they're basically saying, 'It's coming,'" Julia Coronado, president and founder of Macropolicy Perspectives, tells Axios.
Fed vice chair Richard Clarida spoke to attendees at the conference and asserted in prepared remarks that the central bank was evaluating the outbreak and did not want to overreact.
Between the lines: Fed fund futures prices show traders now see a 62% probability the Fed cuts U.S. interest rates by its April meeting and an 87% chance of a cut by July.
Don't sleep: The response of the Trump administration also has been a major worry, according to Douglas Holtz-Eakin, president of the American Action Forum, and Harvard professor Jason Furman. (Both previously served as chief economists for the Council of Economic Advisers.)
Nearly all rural areas in the U.S. have experienced substantial loss of businesses in the past decade as small businesses have been almost entirely concentrated in big cities and urban suburbs since the Great Recession. (Axios)
Amazon opened its checkout-free, 10,400-square-foot Go grocery store in Seattle on Tuesday. (WSJ)
A wave of CEO departures was announced Tuesday, as the chief executives of Mastercard, Salesforce, Thomson Reuters and Disney all had notice of their impending departures made official.
Driving the news: Disney CEO and Ithaca College alumnus Bob Iger will move into an executive chairman role at the company and be replaced by parks chairman Bob Chapek effective immediately.
The big picture: The incredibly high-profile turnover announcements are part of what has become an emergent trend at the top of U.S. businesses over the past year.
By the numbers: In January, 219 CEOs left their positions, a 37% increase from December when 160 CEOs departed.
Of note: The timing of the announcements is odd, not just because four large companies announced them on the same day, but because they appear timed to drop while much of the public's attention is focused on the coronavirus outbreak.
The Treasury held an incredibly weak auction of 2-year government debt Tuesday that saw primary dealers, who are essentially on clean-up duty, take home their highest share of the auction since December 2018.
What it means: Even though yields on the 2-year note have fallen by nearly 40 basis points this year, traders are convinced that there is "certainly more room for yields to fall," Ben Jeffery, rates analyst at BMO Capital Markets, tells Axios.
Why it matters: It's the latest evidence that the market is growing more certain the Fed will cut U.S. interest rates this year.
One level deeper: "As for the auction, it suggests that given how far and how fast the move has run, some primary market participants seem to be of the mind more attractive entry points could present themselves over the near term," Jeffery adds.
Another level deeper: The coronavirus outbreak has hurt the buying power of investors in Japan and China, who are direct bidders in U.S. Treasury auctions, a category of buyer that typically takes a substantial percentage.
When President Trump launched the U.S. into a trade war in 2018, many fund managers argued that small cap stocks were poised to outperform because their business would be immune to tariffs and uncertainty.
Flashback: "Whereas small companies previously drove innovation by disrupting bigger companies with new technologies and ideas, today many large companies can simply buy competitors to generate growth in-house," I wrote in March 2018.
What I was hearing: “If big companies like Alibaba, Amazon, Facebook, Tencent are just going to keep on winning, then the concept of buying small caps changes,” Erik Weisman, chief economist at MFS Investment Management, told me. “In a world where winners take all and just keep on winning, we don’t see small firms that show up on the public playing field.”
Richard Clarida is back in the recording studio cooking up some heat, the Fed vice chair tells Axios exclusively.
Scoop: Clarida is working on a follow-up album to 2016's certified banger "Time No Changes," he says, and has already recorded a number of tracks.
The big picture: He was tight-lipped on when the album would be released or whether there would be a collaboration with Fed chair Jerome Powell.
Straight from the source: "I have been in the studio," Clarida says. "But I've been a little busy lately."
The intrigue: There is concern that the vice chair's status as a federal employee could force him to push back the album's release date, his communication officer tells Axios.
Go deeper: Listen to Clarida's "Just Can't Wait" on YouTube. His album is also available on Spotify, Apple Music and Tidal.
August Wilson was a Pulitzer-prize winning playwright who changed the face of theater.