Although there’s still no way to tell how long the COVID-19 shutdown will last, or how much economic damage will result, the Federal Reserve’s speedy descent to the zero lower bound will assist the recovery, according to a report. “The full impact of the pandemic on the economy is still uncertain and depends on many factors,” writes Vasco Cúrdia a research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco in an Economic Letter. “Analysis suggests that...

The Federal Reserve’s first foray to the zero lower bound lasted from 2008 until 2015. Now again, the unprecedented shutdown of the U.S. economy to try to slow the spread of the coronavirus led the Fed to cut rates to near zero in mid-March. While no one knows how long the virus will keep the economy shut down, analysts expect the Fed will have to keep rates at ZLB for the foreseeable future. “The Fed has taken its policy rate to the lower bound, has said it will be there for some time, and...

Consumer confidence dropped in March as the economy shut down to prevent the spread of the coronavirus, but economists expected a larger decline. The consumer confidence index fell to 120.0 in March (1985=100) from 132.6 a month earlier, the Conference Board said Tuesday. The reading was the lowest since July 2017 The present situation index dropped to 167.7 from 169.3, while the expectations index plunged to 88.2 from 108.1. Economists polled by IFR Markets expected confidence to fall to...

Wednesday’s economic data were not as bad as projected, but included just the beginning of the effects of the coronavirus on the economy. Jobs in the private sector contracted in March, with 27,000 fewer jobs, according to the ADP employment report released Wednesday. Economists polled by IFR Markets expected 154,000 lost jobs in the month. The February read was revised down to a 179,000 gain from the initially reported 183,000 rise. The report, and the monthly employment report, use payroll...

Incoming data continued to show massive hits from the efforts to stem the spread of COVID-19, with jobless claims doubling and the New York manufacturing sector hitting all-time lows in activity. “As the developments on the virus worsen, the mitigation efforts will be subject to becoming more aggressive and the markets will be subject to more aches and pains,” said Marty Mitchell of the Mitchell Market Report. And with President Trump suggesting air travel could be “curtailed” in hot spots of...