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Market’s Virus Panic Makes Last Year’s Preemptive Fed Easing Look Futile

  • Conditions are about as bad as late-2018, before Fed cut rates
  • Futures are pricing in almost 100 basis points of 2020 easing
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Mohamed El-Erian Breaks Down Coronavirus Impact Into Four Stages

Traders are behaving like they’ve already forgotten last year’s preemptive Federal Reserve rate cuts.

Updates on the coronavirus’s global spread have caused strains in U.S. markets to return to late-2018 levels, according to a Bloomberg index of U.S. financial conditions. That bout of volatility 14 months ago, stirred by concerns over the U.S.-China trade dispute, set the Fed on a path to 75 basis points of easing.