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The FOMC rate cut decision was scheduled Wednesday March 18.

Instead, the Fed made this emergency Monetary Policy Statement today.

The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee's symmetric 2 percent objective.

The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals. To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Randal K. Quarles. Voting against this action was Loretta J. Mester, who was fully supportive of all of the actions taken to promote the smooth functioning of markets and the flow of credit to households and businesses but preferred to reduce the target range for the federal funds rate to 1/2 to 3/4 percent at this meeting.

$700 Billion in QE

That's another $700 billion in QE, in addition to the $1.5 trillion in QE (but let's not call it that) announced last week.

On Thursday March 12, I reported Fed to Inject $1.5 Trillion in Liquidity But Markets Plunge Again.

Futures Limit Down

It appears we are going to have a repeat performance on Monday as futures are limit down.

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Gold is up $56 to $1572.

Illinois Mandates Closure of All Bars and Restaurants Until March 30

Earlier today I noted Illinois Mandates Closure of All Bars and Restaurants Until March 30

Ohio has done the same and New York is likely as the NYC Comptroller Wants to Shut All Restaurants and Bars.

Massachusetts Orders Closures

The NBA, NHL, NCAA March Madness, and countless schools are closed.

Italy and Spain have nationwide lockdowns, and all air traffic into the US from the EU is closed down.

Understanding Trump's Management Process

The economic impact will be staggering.

Out of Bullets

The Fed is out of bullets. But don't expect the Fed to ever admit that.

Mike "Mish" Shedlock