This week has seen the start of a coordinated monetary and fiscal policy response from G7 countries to the economic and market impacts of Coronavirus. China commenced their response three weeks ago.
Of course, everyone understands that monetary and fiscal policy response won’t slow the spread of the virus, but they are a necessary first step to provide liquidity and relief to businesses and consumers being directly hit by the impacts of this virus.
Nobody should believe for a second that central banks think they can cure the virus as such. To quote Fed Chairman, Jay Powell: “A rate cut will not reduce the rate of infection. It won’t fix a broken supply chains. We get that. But we do believe that our action will provide a meaningful boost to the economy”.