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Situational Awareness: Fed chair Jerome Powell says the central bank still has plenty of ammunition in an interview on NBC's "Today" show.
🎙"I have had dreams and I have had nightmares, but I have conquered my nightmares because of my dreams." - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
Perhaps the most important thing about the $2.2 trillion stimulus bill the Senate passed late Wednesday night is that it is not a stimulus bill at all.
Why it matters: The bill's price tag is around 10% of U.S. GDP, and Congress is already bickering internally — as well as with various lobbyists and policy advocates — about whether it goes far enough in a plethora of directions. Even if the bill passes, the story won't be over:
What it means: "This should not be thought of as a stimulus bill — this should be thought of as social insurance in a disaster state of the world for the most hard hit," Jonathan Parker, professor of finance at MIT, said during a virtual briefing with reporters Wednesday.
State of play: The bill includes unprecedented direct payments to individuals — up to $1,200 a person and $500 per child, even for those who have no income, plus extended and upgraded unemployment insurance, even for gig workers.
The legislation includes $150 billion for state and local governments, which run the bulk of the nation’s overburdened public health services.
It includes $350 billion for small businesses and $500 billion for large companies in loans, loan guarantees and other investments.
"Most companies can cope with a 15- to-30 day lockdown, but a few additional weeks would likely exhaust available resources for a significant number," Moody's said. "This crisis is beyond what they could have reasonably prepared for."
At 8:30 this morning, the Department of Labor is expected to announce that as many as 4 million people filed for unemployment insurance last week, jumping from the previous week's total of 281,000.
Between the lines: "The market doesn’t seem to realize that this will get a lot worse before it gets better, that we’re still in the early stage of this," Gennadiy Goldberg, U.S. rates strategist at TD Securities, tells Axios.
What's next: In the next week, data will be released showing U.S. durable goods orders, two readings on the U.S. manufacturing sector, two consumer confidence surveys, and on Friday, April 3, the government's nonfarm payrolls report.
Governments have wasted precious time in the fight against COVID-19, WHO Director-General Tedros Adhanom Ghebreyesus said. "The time to act was actually more than a month ago or two months ago.” (Bloomberg)
The Senate passed the stimulus plan with a 96-0 vote and the bill now heads to the House, which is scheduled to hold a voice vote on Friday. (Politico)
Chinese Finance Minister Liu Kun said the country will increase fiscal stimulus to support the expansion of domestic demand. (Xinhua)
AMC Entertainment, the world’s largest theater operator, placed its CEO and all of its corporate employees on furlough to preserve cash during the coronavirus outbreak. (Reuters)
Axios' Dave Lawler writes: Foreign ministers of the G7 countries failed to agree to a joint statement following a video conference Wednesday in part because the Trump administration insisted the statement refer to the COVID-19 outbreak as the "Wuhan virus," Der Spiegel first reported and multiple U.S. outlets have confirmed.
Why it matters: The world's two most powerful countries are in a battle of narratives over the pandemic, with some in Beijing spreading disinformation about its origins and U.S. officials like Secretary of State Mike Pompeo increasingly blaming the Chinese government.
Online grocery shopping has had a renaissance over the past month as the COVID-19 outbreak has sequestered more people indoors.
Why it matters: This could mark a sea change for companies like Amazon, Instacart and Walmart that have been investing heavily in grocery delivery
Investors pulled $153 billion out of mutual funds and ETFs for the week ending March 18, the largest outflows ever, data from the Investment Company Institute showed.
The intrigue: Investors pulled more money out of bond funds than out of stock funds by a magnitude of 10 to one, the data shows.
By the numbers: For mutual funds specifically, bonds saw their largest outflows ever, with investors pulling 1.9% of total January 2020 assets out of funds, ICI senior director of industry and financial analysis Shelly Antoniewicz tells Axios.
Quick take: The outflows from bonds likely reflect the fact that investors have loaded up on bond funds over the past two years. While equity funds saw their largest outflows on record in 2019, despite the S&P 500 gaining 30%, bond funds saw near record inflows.
The Treasury market is getting back to normal after the Fed's massive bond-buying announcement earlier this week.
What to watch: Yields on Treasury bills were negative out to three months, closing in the red late Wednesday, as traders continued to favor paying to loan the government money over buying longer-dated bonds.
Major key: Treasuries have seen a significant decline in the bid-ask spread on prices for notes and bonds since the Fed took action.
Quote: "I have had dreams and I have had nightmares, but I have conquered my nightmares because of my dreams."
Why it matters: On March 26, 1953, Dr. Jonas Salk announced on a national radio show that he had successfully tested a vaccine against the virus that caused polio.