Update On COVID-19 & "The Next Recession"

Friday, February 21, 2020

We don’t see any major new economic data ahead of today’s opening bell, although later this morning we expect results from February’s PMI Manufacturing and Services releases. For January, these figures came in at 51.9 and 53.4, respectively, both above the 50-point threshold with Services looking a tad stronger than Manufacturing. After yesterday’s strong Philly Fed survey, we look for further evidence that Manufacturing may have begun rebounding.

There are no reported new countries where the Wuhan coronavirus — COVID-19 — appears to have spread as of today, though the death toll as well as the number of confirmed cases continues northward. The viral disease, still roughly 99% of which has reportedly been contained within the country of China, has so far killed 2250 people and infected nearly 77K others. This may demonstrate results of effective measures in controlling the spread of the disease, but it may also represent a dearth in public information being made available from certain countries.

The next meeting of the Federal Reserve is not until March 17th and 18th, which will coincide with a comprehensive Summary of Economic Projections (no doubt including potential economic fallout from COVID-19 and its subsequent effects on the global labor force), but today we look forward to a U.S. Monetary Policy Forum sponsored by the Booth School at the University of Chicago. The forum will take place in New York City.

Featured speakers will include Fed Vice Chair Richard Clarida, Board of Governors member Lael Brainard and Fed President of Atlanta, Raphael Bostic. The title for this forum is “Monetary Policy for the Next Recession.” We will pay close attention whether there is consensus on when this might be expected.

Mark Vickery
Senior Editor

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