Michael R. Strain, Columnist

How Congress Could Fire Up a Coronavirus Economy

The Fed can’t prevent a slump by itself. That’ll take tax tweaks and other fiscal stimulus measures.

March 5, 2020 at 11:30 AM UTC

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

On the case.
Photographer: Stefani Reynolds/Bloomberg

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The Federal Reserve’s emergency interest-rate cut on Tuesday didn’t persuade investors to overlook the potential economic impact of the coronavirus epidemic.

Though the Fed made the right call, the market’s gloomy reaction on Tuesday was reasonable. Lower interest rates can’t send people back to work in a factory that has shut down, or to conferences that have been canceled. They can’t strengthen global supply chains that have weak links due to slowdowns in overseas production, and they can’t coax people back into concert venues, movie theaters, and restaurants, or to travel. And, without coordinated action from other nations, the Fed alone can’t stem a global economic slowdown.