STEVE INSKEEP, HOST:
We find out today what investors think of the latest effort to stabilize the economy.
RACHEL MARTIN, HOST:
Jerome Powell, chairman of the Federal Reserve, was in the office Sunday. He announced an emergency interest rate cut, the second in a month. This time, though, he's moving short-term interest rates to near zero. Powell acted amid President Trump's loud demands to do more. The number of known coronavirus cases in the U.S. now has increased sharply to 3,700. Schools are closed, so are many businesses. And all of that is wreaking havoc on the economy. So why did investors take a dim initial view of the Fed's response?
INSKEEP: NPR chief economics correspondent Scott Horsley is here. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: And by here, we should note, at home, Scott, which is a nice, safe distance from everybody. So thank you very much for doing that.
We are talking before the trading day is played out in New York, so we don't know everything about investors' response. But what is known?
HORSLEY: We do know, Steve, that stocks in Europe and Asia were down sharply overnight. We know that the futures market is pointing to another big sell-off here in the U.S. when the market opens in a few hours. What you're hearing right now is loud alarm bells, both from the public health officials as well as financial authorities. Worldwide deaths from the coronavirus outside China have now surpassed those inside China, where this pandemic began. And we are beginning to see the kind of wholesale, some might say draconian, measures in the economy here in the West that we saw weeks ago in China's Hubei province.
The governors in California, Ohio, Illinois, Massachusetts and Washington state have ordered bars and restaurants and wineries closed. Mayors in major cities, like New York, have ordered similar restrictions. Last week, we saw the shutdown of the NBA and Major League Baseball. Now it's filtering down to the corner restaurant. This is really an unprecedented shock to both the U.S. and the global economy.
INSKEEP: Well, I'm trying to think this through. You have the Fed governors meeting on a weekend, which suggests that they had heard really grim news and decided that all of their measures so far were insufficient; they needed to make this emergency move. Then they make the emergency move, and financial markets around the world immediately begin sliding again. That suggests people are unimpressed.
HORSLEY: Sometimes when a doc administers strong medicine, it just scares everyone who's watching the patient from the bedside. The Fed is doing everything it can to put foam on the runway and cushion what is sure to be a rough landing for the economy.
Fed Chairman Jerome Powell acknowledged, in a conference call with reporters last evening, that the U.S. economy is almost certain to contract in the months to come. How could it not with all these shutdowns? He was repeatedly pressed on how long this downturn might last. And he said that's frankly unknowable. It depends on the spread of the virus. However, Powell did try to offer some reassurance.
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JEROME POWELL: We do know that the virus will run its course and that the U.S. economy will resume a normal level of activity. In the meantime, the Fed will continue to use our tools to support the flow of credit to households and businesses.
HORSLEY: Powell stressed that the Fed still does have tools available. But having now cut interest rates effectively to zero, it's already used its biggest, baddest hammer.
INSKEEP: Yeah, which is getting down to zero, lowering those interest rates. But that raises another question - how does the Fed effort match the actual problem?
HORSLEY: Not particularly well. This may not be the medicine that the economy needs right now. If people are hunkered down at home - if the shops and restaurants are closed, then the interest rate doesn't really make that much difference. Now, the central bank is encouraging ordinary banks to lend to struggling businesses and consumers. But this may take a fiscal rescue, as well.
We did see the House act last week to offer additional unemployment benefits and sick leave - although not for all employees - also more food assistance. Chairman Powell did suggest that there is another role for additional fiscal action here to cushion the blow.
INSKEEP: Scott, thanks for the update.
HORSLEY: You're welcome, Steve.
INSKEEP: NPR chief economics correspondent Scott Horsley.
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INSKEEP: Not for the first time, the federal government says many, many coronavirus tests are on the way.
MARTIN: Yeah, that word comes from Admiral Brett Giroir. He is leading the Department of Health and Human Services' efforts in coordinating testing. And he says the U.S. is now ready to deploy drive-through and walk-through testing sites beginning this week in the hardest-hit areas.
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BRETT GIROIR: This is not make-believe. This is not fantasy. We've developed the model. We've talked to the states. We're focusing in on specific locations now.
MARTIN: So Giroir had to stress that this was real because the government has said time and again that testing was widely available when it was not. The CDC distributed a million test kits at one point, but those tests were time-consuming. And it's not clear how many were used. Widespread anecdotal reports said Americans rarely were getting tests. Officials now say each new testing site will be able to screen up to 4,000 people per day.
INSKEEP: So what's the evidence show here?
NPR global health and development correspondent Jason Beaubien has been watching it all. Jason, good morning.
JASON BEAUBIEN, BYLINE: Good morning.
INSKEEP: Is this a new way of getting tests to the public?
BEAUBIEN: In a way, it is. It's, you know - they're talking about these pods that they're going to distribute across the country and try to just get over this real huge problem that they've had in this outbreak, which is that tests have not been available. These are also supposed to be a faster testing system. The other ones, some of them were sort of a low throughput. These are supposed to be a high throughput system. Again, the proof is going to be in the pudding. We're waiting to see it. But it's definitely - they say they've got a system, and it's something that is desperately needed. Yeah.
INSKEEP: Yeah, this is so distressing to people that I feel I want to dwell a little bit on the details. When you said low throughput...
INSKEEP: ...That just means that it was really time-consuming, took a lot of time in the lab, hard to do a high volume of tests. Now you say high throughput, which means some system for doing a lot of tests faster, as has happened in other countries. But when you say pods, what is that exactly? What's going to show up in New York or some other hard-hit place?
BEAUBIEN: We don't know exactly what these are going to look like. But we have had some examples. There were some - out in Colorado, there was a drive-through system that was set up. And people could drive up. They had to have a note from a doctor beforehand. They could go, and everything would happen right there, which is, in a way, good, because it means you're not going into a health care system. You're not having to go into an emergency room, get yourself exposed...
BEAUBIEN: ...Potentially expose other people. So we think that that's what the model is going to look like. Exactly what it's going to be is still going to - you know, we're going to have to see what it looks like. But that's the model that we're going towards.
INSKEEP: We've all assumed, as laymen, that more testing will tell us better who has this, how widespread it is and how to respond. That's what we've assumed. Is that what experts also say? Are they as concerned about testing everybody as the rest of us seem to be?
BEAUBIEN: Definitely this is a huge issue that if you don't have testing, you don't know where the huge problems are popping up, it's really hard to contain things. And so for experts, it is very crucial that we get a good system in place, know who's infected, who isn't. At the same time, we have to do everything else. We need to get the emergency room set up, need to get systems in place, to - yeah - do this social distancing that the governors have been talking about. So it's not the only thing, but getting the tests working and functioning is a huge part of getting this under control.
INSKEEP: We will continue watching closely through the week to see if this time the federal government's words are matched by the actions that follow.
Jason, thanks very much.
BEAUBIEN: You're welcome.
INSKEEP: That's NPR's Jason Beaubien.
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INSKEEP: As it happened, six feet separated Joe Biden and Bernie Sanders at last night's presidential debate held without an audience, following guidelines from the CDC.
MARTIN: Right. And they didn't shake hands when they approached each other...
MARTIN: ...They did the old elbow bump. So the two Democratic front-runners were the only two candidates on the CNN stage. This happened two nights before four more states hold primaries. Unsurprisingly, the night centered on each candidate's response to the coronavirus. But some other news came from Vice President Joe Biden.
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JOE BIDEN: There are a number of women who are qualified to be president tomorrow. I would pick a woman to be my vice president.
INSKEEP: And our colleague Asma Khalid was watching all of this and tweeting about it in real time, as a matter of fact. Asma, good morning.
ASMA KHALID, BYLINE: Good morning, Steve.
INSKEEP: As you noted in your tweet, Biden made that statement. The moderator said, are you sure? You mean, you're going to definitely pick a woman? And his answer was, yes, right?
KHALID: That's right. And I will say, you know, Steve, this was not particularly surprising. It was new in terms of the level of confirmation that he said in terms of pledging he would do this. But the former vice president has long hinted at this. Bernie Sanders, I should add, was also asked if he would do the same. And he said, in all likelihood, he would.
This is a Democratic Party where the two front-runners are acutely aware that they are elderly white men. And I interpreted Biden's pledge as just one more step in a broader push to tie up this contest and unify the party. It is why, also recently, he announced he would be endorsing the progressive bankruptcy plan that one of his former opponents, Massachusetts Senator Elizabeth Warren, put out - bankruptcy, an issue that he and her have differed about for many, many years.
INSKEEP: So I want to talk a little bit about this debate. It was different in format, different in tone. I felt - you'll tell me if you feel differently - that the candidates sounded differently. They spoke differently because there wasn't a big audience. They were just talking to each other. There were just two of them. There was this crisis to focus them, and so you had two candidates talking about one thing for a good long time.
KHALID: They were, and that was the coronavirus. They were united in their criticism of how poorly they felt President Trump has handled the issue. But to me, the sharp issue and the sort of sharp differentiation on how they felt like the crisis itself should be handled was, perhaps, one of the sharpest differences we've seen in any debate between two candidates.
Sanders sees the coronavirus issue as a health care crisis, and so he's been arguing that this is why the country needs "Medicare for All." That's his signature issue, a free government-run health coverage for all Americans. Biden pointed out that Italy has a single-payer health system and that did not prevent the coronavirus there. He emphasized what's needed right now is immediate action and he has experience given the Ebola crisis during President Obama's time.
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BIDEN: People are looking for results, not a revolution. They want to deal with the results they need right now. And we can do that by making sure that we make everybody whole who has been so badly hurt in terms of their - they lose the job, in terms of not having the ability to care for their children, in terms of the health care costs that they have related to this crisis. We can make them whole now.
KHALID: And Steve, you know, to me, this was just such a sharp, clear ideological difference. It was a real debate. And I would say, you know, it increasingly seems that Biden has the path to the nomination. But Bernie Sanders has been pushing him on issues - you know, whether it's free tuition, whether it was the Iraq War - but issues that he feels like the vice president, if he were to be the nominee, needs to address clearly.
INSKEEP: Asma, thanks so much.
KHALID: You're welcome.
INSKEEP: That's NPR's Asma Khalid on last night's Democratic debate. Four states vote tomorrow. Transcript provided by NPR, Copyright NPR.