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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.

  • Most major economies in Asia are expected to either slow down significantly, halt or shrink outright in the first quarter, according to Reuters consensus polls.

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.

  • "The risk that it spills over to consumer confidence is one of the biggest risks, and the other big risk is that you get a major metropolitan area that has to shut down."
  • "The spillover to confidence is a much bigger issue than temporary interruptions to activity that can be made up later."
  • "It's a psychological thing and that feedback loop is an essential element of every recession."

Fed Vice Chairman 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.

  • But he also said that decisions about monetary policy now will be made on a “meeting-by-meeting basis,” a notable change from the Fed's previous stance that it plans to remain on the sidelines for 2020.
  • “If developments emerge that, in the future, trigger a material reassessment of our outlook, we will respond accordingly,” Clarida added.

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.

  • In fact, there's a 52% chance of two rate cuts 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.)

  • "You have to explain in a transparent fashion the nature of the threat that you’re dealing with so people don’t panic. I don’t see enough of that going on," Holtz-Eakin said during a meeting with reporters.
  • "This economy has been held up by household spending, consumer confidence has been high and risen, and anything that dings that up changes the way you think about what’s going on."

Go deeper:

Go deeper

Tech scrambles to derail inauguration threats

Illustration: Sarah Grillo/Axios

Tech companies are sharing more information with law enforcement in a frantic effort to prevent violence around the inauguration, after the government was caught flat-footed by the Capitol siege.

Between the lines: Tech knows it will be held accountable for any further violence that turns out to have been planned online if it doesn't act to stop it.

Dave Lawler, author of World
2 hours ago - World

Uganda's election: Museveni declared winner, Wine claims fraud

Wine rejected the official results of the election. Photo: Sumy Sadruni/AFP via Getty

Yoweri Museveni was declared the winner of a sixth presidential term on Saturday, with official results giving him 59% to 35% for Bobi Wine, the singer-turned-opposition leader.

Why it matters: This announcement was predictable, as the election was neither free nor fair and Museveni had no intention of surrendering power after 35 years. But Wine — who posed a strong challenged to Museveni, particularly in urban areas, and was beaten and arrested during the campaign — has said he will present evidence of fraud. The big question is whether he will mobilize mass resistance in the streets.

Off the Rails

Episode 1: A premeditated lie lit the fire

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 1: Trump’s refusal to believe the election results was premeditated. He had heard about the “red mirage” — the likelihood that early vote counts would tip more Republican than the final tallies — and he decided to exploit it.

"Jared, you call the Murdochs! Jason, you call Sammon and Hemmer!”