At least one quarter-point cut is coming on March 18, as Powell signals Fed Ready to Cut Rates Despite Doubt They Can Fix Virus Fallout.

Fed Chairman Jerome Powell opened the door to a rate-cut at the Fed’s March 17-18 meeting by issuing a rare statement Friday pledging to “act as appropriate” to support the economy.

Powell’s intervention 90 minutes before the stock market’s close on Friday marked a sharp pivot from the previous message of policy makers that it was way too soon to judge the economic impact of the China-borne epidemic.

“We’re going to get infections here and there for quite a while,” said former International Monetary Fund chief economist Olivier Blanchard, who is now with the Peterson Institute for International Economics in Washington. “The economic cost may be large.”

One Cut or Two?

The only debate now is whether there would be one rate cut or two.

Prior to Powell's intervention message on Friday, I commented New Record Low Yields on 10- and 30-Year Bonds: Double Cut?

I expect a 50-basis point cut per my Friday point: "A quarter point cut would leave the 10-year treasury yield inverted with the Effective Fed Funds Rate by 16.3 basis points."

Mike "Mish" Shedlock