CDC Admits Coronavirus Patient Accidentally Released Because Of “Lab Mix-Up”; Bullard Says Virus Still “Tail Risk” For Markets
by Tyler Durden
ZeroHedge.com
Tue, 02/11/2020
Summary:
Two inmates at a UK prison are being tested for coronavirus and have been restricted to their cells
13th case diagnosed in San Diego was evacuee rescued from Wuhan, she was briefly accidentally released
China death toll tops 1,000, globally cases top 40k
CNBC’s Eunice Yoon reports on China’s sluggish ‘return to work’
Hong Kong building residents quarantined over fears virus spread via pipes
Cruise ship with 0 nCoV cases refused entry to fourth port, in danger of running out of food
Beijing fires top health officials in Hubei, summons others to Beijing for an explanation
Scientists in Hong Kong and the mainland present vastly different takes on virus
2 Japanese men test positive but were accidentally released
President Xi says China will be ‘more prosperous’ after outbreak
Experts suspicious about how Indonesia hasn’t reported any nCoV cases
Xi also reportedly warned top officials that efforts to contain the virus had gone ‘too far’
CDC admits lab “mix up” led to coronavirus patient being briefly released back to quarantine
Another citizen journalist goes missing in China
Hilton warns travel numbers could be impacted for up to a year after Under Armor saw shares plunge on sales warning
Bullard warns virus still major “tail risk” for US economy and markets
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Update (1415ET): For everybody buying on Tuesday, uber-dove Jim Bullard, the president of the St. Louis Fed, has some advice: until the coronavirus pandemic has been completely contained, it will continue to pose a tail risk to the market.
Bullard, who spoke Tuesday following Congressional testimony by Fed Chairman Jay Powell, added that the three rate cuts last year will cushion the economy, but even that might not be enough to offset all of the economic uncertainty that markets are facing this year, from the virus to the presidential race.
Bullard
This after Powell – who was attacked by President Trump in the middle of his testimony via another Fed-bashing tweet calling for lower rates and a weaker dollar -said that the US economy “looks resilient” despite the coronavirus risk.
But Bullard apparently maintains a somewhat more cautious view:
“The efforts to bring the virus under control are substantial enough that the Chinese economy is expected to grow noticeably slower in the first quarter of 2020 than it otherwise would have,” Mr. Bullard said. “Experience with previous viral outbreaks suggests that the effects on U.S. interest rates can be tangible and last until the outbreak is clearly contained,” he said.
As futures markets price in at least one rate cut in 2020, Bullard said monetary policy “feels a bit too accommodative.” That’s saying something coming from one of the more dovish Fed presidents, though Bullard won’t be a FOMC voter again until 2022, assuming he’s still the president of the St. Louis Fed at that time.
The easing has shifted the outlook for short-term US rates considerably, he added.
“The efforts to bring the virus under control are substantial enough that the Chinese economy is expected to grow noticeably slower in the first quarter of 2020 than it otherwise would have,” Bullard said. “Experience with previous viral outbreaks suggests that the effects on U.S. interest rates can be tangible and last until the outbreak is clearly contained.”
But ultimately, we will need to “wait and see” whether the coronavirus truly becomes the catalyst of a global slowdown, like many analysts fear. Barring that, “the current baseline outlook for 2020 suggests a reasonable chance that a soft landing will be achieved,” Bullard said.
The St. Louis Fed twitter account shared this report that seems to expand upon the theme that monetary policy is much looser than the market realizes.
Bullard says the size of the turnaround in U.S. monetary policy in 2019 has been much larger than the three interest rate reductions alone would suggest https://t.co/I3OLwqmBT4 pic.twitter.com/ckC3iIa91O
— St. Louis Fed (@stlouisfed) February 11, 2020
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