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🎙 "If the populace knew with what idiocy they were ruled, they would revolt." - See who said it and why it matters at the bottom.
Growing worry over the widespread outbreak of the Wuhan coronavirus is compounding an already jittery market and flipping the switch from risk-on to risk-off, as investors sell stocks and buy bonds.
Why it matters: The yield curve already has inverted out to seven years and is within spitting distance of the 3-month/10-year inversion that economists at the Fed call the "best summary measure" of economic downturn for the second time in less than a year.
Details: President Trump's impeachment trial took an unexpected turn when the New York Times reported former national security adviser John Bolton's claim that Trump told him aid to Ukraine was dependent on the country investigating Joe and Hunter Biden.
What we're hearing: "We're ... getting pretty nervous that we'll see another inversion," Ian Lyngen, head U.S. rates strategist at BMO Capital Markets, tells Axios. "'Recessionary fear' headlines will surely make the rounds again."
The Fed's balance sheet shrank last week with holdings touching their lowest level since mid-December, the strongest decline since the Fed restarted its bond-buying program in September.
Why it matters: The Fed will likely have to address its longer-term plans for liquidity injections to the repo market and the program that chair Jerome Powell has insisted on referring to as "not QE," (but many market participants have dubbed "QE4," or the fourth phase of quantitative easing).
Between the lines: That likely paints the Fed into a corner in addressing the program at its meeting tomorrow, Tom Essaye, director of Sevens Report Research, says in a note.
Go deeper: Fed's first hurdle in 2020: Dispensing with 'QE Lite' (Reuters)
Sen. Mitt Romney said it is "increasingly likely" at least four GOP senators would join Democrats in calling for Bolton to testify in the Senate impeachment trial. (Politico)
Apple has asked suppliers to make up to 80 million iPhones in the first half of the year, 10% more than the previous year's output, but suppliers are concerned the coronavirus outbreak could dampen output. (Nikkei)
Automakers have banned travel to China, are withdrawing employees from the country and weighing whether to suspend manufacturing there entirely. (CNBC)
President Trump's tariffs have notably increased the price of aluminum for U.S. businesses and consumers, a study provided first to Axios shows.
Why it matters: Trump has insisted the cost of the tariffs would be borne by China and other exporters, but the data shows that Americans are paying the costs.
Background: The price of aluminum worldwide spiked in April after the Treasury Department put sanctions on Russian producer Rusal, following Trump's announcement of 10% aluminum tariffs on every country (with exceptions eventually carved out for allies like Australia, Canada and Mexico).
The intrigue: Trump on Friday doubled down on the aluminum tariffs, adding derivative aluminum products such as nails, tacks, staples, wire and parts for cars and tractors, meaning more price hikes are likely on the way.
The bottom line: "There have been assertions that China is paying the tariffs," study co-author Holtz-Eakin says. "And that’s not true."
Boeing secured commitments of over $12 billion in financing from more than a dozen banks, CNBC reported Monday, citing unnamed sources.
Why it matters: The bailout will help Boeing maintain a healthier cash position as it deals with the fallout from a mandatory production stoppage of its 737 MAX jet after two crashes that killed hundreds of people.
The big picture: Pantheon Macroeconomics chief economist Ian Shepherdson predicts today's durable goods report will show a 2% year-over-year decline as a result of Boeing's troubles.
Of note: As I wrote two weeks ago, Moody's has warned that Boeing's suspension could hit dozens of companies, identifying 24 with exposure to Boeing and its supply chain and placing four on review for downgrades.
Illustration: Eniola Odetunde/Axios
Axios' Courtenay Brown writes: A showdown over the Community Reinvestment Act (CRA) will take place Wednesday in a hearing hosted by the House Financial Services Committee.
On the hot seat will be the banking regulator who proposed the changes — Joseph Otting, the Trump-appointed head of the Office of the Comptroller of the Currency.
Go deeper: Read the full story here.
On Jan. 28, 814, Charlemagne, or Charles the Great, died. During the early Middle Ages, he united the majority of central and Western Europe.