• House Speaker Nancy Pelosi (D-Calif.) in an interview floated a retroactive rollback of the state and local tax deduction cap in the next economic rescue package, a measure that would provide a quick cash boost in the form of rebates for an estimated 13 million households, almost all of them earning at least $100,000 a year. A spokesperson for Pelosi said the proposal would be “tailored to focus on middle-class earners and include limitations on the higher end.” (The New York Times)

• The federal government will start sending stimulus payments in the next three weeks as part of the new law that will give $1,200 to most adults and $500 for children under age 17, officials said. The payments will be distributed automatically, although some seniors and others who don’t file taxes will have to file a simple return, according to the Treasury and Internal Revenue Service. (The Wall Street Journal) 

• The Federal Reserve is skeptical that Wells Fargo & Co. is ready to have its asset cap lifted, according to people familiar with the situation, even as the bank’s representatives have asked the central bank to temporarily remove the cap so it could lend to customers affected by the coronavirus pandemic. The bank, which could issue $384 billion in additional loans if the restrictions were eased, has confidentially warned the Fed that the company will miss an April deadline to submit a plan for improvements required by the central bank. (Bloomberg) 

Treasury eyes new roles for top officials as they scramble to implement $2 trillion stimulus package
Jeff Stein, The Washington Post

The Treasury Department is looking at creating new roles for some of its top officials as they work to rapidly implement the $2 trillion coronavirus stimulus law, according to three people with knowledge of the discussions. Treasury Secretary Steven Mnuchin played a central role in helping Congress write the law, and has made multiple media appearances in recent days pledging to swiftly put it into action. But a number of his top advisers are working behind the scenes to coordinate the rollout, and their roles could be formalized soon.

The Fed Transformed: Jay Powell Leads Central Bank into Uncharted Waters
Nick Timiraos, The Wall Street Journal

To meet the dislocation the coronavirus pandemic unleashed on the economy, Federal Reserve Chairman Jerome Powell has mobilized the central bank to move faster and farther than ever before. In the short weeks since financial markets seized up, Mr. Powell has placed the Fed on wartime footing. He took up the central bank’s playbook from the 2008 financial crisis and then some—cutting rates to near zero, purchasing huge quantities of government debt and, breaking a taboo, lending to American businesses.

Why some of America’s best-known companies won’t qualify for bailout money
Victoria Guida and Theodoric Meyer, Politico 

Macy’s and Gap Inc. are furloughing most of their workers as their sales collapse — but they might not qualify for the massive backstop for companies that Congress just passed because their finances are so bad that their debt is rated as junk. The two iconic retailers and other companies running out of cash can’t tap into the new loan program backed by the Federal Reserve because it’s only available to corporations whose debt is considered safe by credit rating firms.

Steven Mnuchin Is Trying to Rescue the Economy From the Coronavirus
Kate Davidson and Bob Davis, The Wall Street Journal

At a World Economic Forum dinner in Davos, Switzerland, Treasury Secretary Steven Mnuchin spoke up. It was 45 minutes into a conversation about climate change and trade, and no one had mentioned the most important issue facing the world, he said: The deadly new coronavirus spreading across China.

Goldman Sachs Sees 34% Plunge in U.S. GDP and 15% Unemployment
Alaa Shahine, Bloomberg

Goldman Sachs Group Inc. expects the U.S. economy to experience a far deeper slump than previously anticipated as the coronavirus pandemic hammers businesses, causing a wave of mass unemployment. The world’s largest economy will shrink an annualized 34% in the second quarter, compared with an earlier estimate of 24%, economists led by Jan Hatzius wrote in a report.

A Global Conundrum: How to Pause the Economy and Avoid Ruin
Marcus Walker, The Wall Street Journal

The coronavirus has produced something new in economic history. Never before have governments tried to put swaths of national economies in an induced coma, artificially maintain their vital organs, and awaken them gradually. Some past societies, such as medieval Europe, abandoned economic activities as people tried to escape plagues, and suffered heavy disruptions to their social order. 

Nobody Knows What Will Happen When the Rent Comes Due on April 1
Patrick Clark and Nic Querolo, Bloomberg

From landlords to economists to Wall Street traders, a lot of folks are fretting over what’s going to happen on April 1. That question is hanging over the U.S. real estate industry as $81 billion in rent payments come due. 

Janet Yellen Says Too Much Corporate Borrowing Will Hinder Economic Recovery
Michael S. Derby, The Wall Street Journal

Janet Yellen, the former Federal Reserve chairwoman, said Monday bad choices by broad swaths of the financial industry and companies, abetted in part by low rates and regulatory shortcomings, are likely to make it harder for the economy to recover from the coronavirus crisis. While the banking and financial sector was in “generally in good shape” ahead of the crisis, problems were already taking shape, Ms. Yellen said in a video broadcast hosted by the Brookings Institution.

Fed’s Bullard Says U.S. Can Well Afford Trillions in Relief Debt
Steve Matthews, Bloomberg

Adding trillions of dollars of borrowing to the U.S. national debt is necessary fiscal support because of coronavirus-related shutdowns and won’t hamper the country’s ability to grow in the future, says Federal Reserve Bank of St. Louis President James Bullard. “We are taking it on at very low interest rates,” Bullard said in a Bloomberg Television interview with Michael McKee on Monday via telephone from St. Louis, noting that rates will “probably stay very low for quite a while.”

Treasury Urges Airlines to Apply for Payroll Grants by Friday
Kate Davidson and Alison Sider, The Wall Street Journal

The Treasury Department released new details Monday night on how it will award grants and loans for airlines affected by the coronavirus pandemic, and urged companies to submit some applications by Friday to begin receiving funds as soon as possible. The aid was approved as part of a $2 trillion economic relief package Congress passed last week, which included $25 billion in grants, along with $25 billion in loans and loan guarantees for passenger airlines, $4 billion for cargo carriers and $17 billion for other firms critical to maintaining national security.

U.S. Futures Fluctuate; Dollar, Treasuries Climb: Markets Wrap
Todd White and Andreea Papuc, Bloomberg

U.S. index futures fluctuated on Tuesday while European stocks headed for a fifth increase in six sessions amid debate over whether the market meltdown has ended given the continued spread of the coronavirus. Treasuries and the dollar advanced.

Bank of New York Mellon Names Gibbons CEO, Removing Interim Tag
Colin Kellaher, The Wall Street Journal

Bank of New York Mellon Corp. BK 4.49% on Monday said it named Todd Gibbons as chief executive, removing the interim tag he has carried since last fall. Mr. Gibbons took the helm of the New York bank in October after Charles Scharf resigned as chairman and CEO to become president and CEO of Wells Fargo & Co.

Big banks left hanging after ‘disaster’ in risky loan market
Robert Smith and Joe Rennison, Financial Times

Wobbles in collateralised loan obligations pose problems for lenders.

Credit Suisse weighs curbing bonuses at time of coronavirus: CEO
Michael Shields, Reuters

Credit Suisse (CSGN.S) bank could restrain 2020 bonuses in a show of unity with victims of the coronavirus epidemic in Switzerland, Chief Executive Thomas Gottstein said on Monday. In three business days, Switzerland’s second-biggest bank has paid out 1.24 billion Swiss francs ($1.29 billion) in loans to around 7,800 companies since the government last week unveiled a 20 billion franc program of state-backed loans at no or low interest to companies hit hard by the epidemic.

Pressure Mounts on Insurance Companies to Pay Out for Coronavirus
Leslie Scism, The Wall Street Journal

Lawmakers and regulators are pressuring insurers to go beyond the legal language of policies to get cash to Americans amid the mounting cost of shutdowns from the coronavirus pandemic. In at least three states, lawmakers have proposed legislation to force insurers to pay billions of dollars for business losses tied to government-ordered shutdowns.

BlackRock’s Fink keeps door open to acquisitions
Eric Platt and Richard Henderson, Financial Times

Chief of world’s largest asset manager strikes a cautiously optimistic note about markets.

FHA, VA join Fannie, Freddie in relaxing some standards
Ben Lane, HousingWire

With the coronavirus continuing to reshape the face of the country and the economy, the biggest players in the mortgage business are moving to make it easier to lend under these extraordinary circumstances. Last week, Fannie Mae and Freddie Mac relaxed their standards for both property appraisals and verification of employment on the loans they buy.

Coronavirus poses new threat to mortgage industry
Sylvan Lane, The Hill

A flood of missed home-loan payments caused by the coronavirus outbreak is threatening to bankrupt U.S. mortgage lenders and deepen the economic toll of the pandemic. Grueling business closures and social restrictions imposed to slow the pandemic have left millions of homeowners jobless and short on their mortgages.

IRS directing most employees to work remotely
Naomi Jagoda, The Hill

The IRS is directing nearly all employees to evacuate their offices and work remotely starting today to reduce employees’ risk of exposure to the coronavirus. The agency sent an email to IRS employees on Friday informing them that employees, including those who were not teleworking but whose work can be adapted to be performed off-site, have to work from home or another location.

Finance Teams Adapt to Closing the Books Remotely Amid Coronavirus
Mark Maurer, The Wall Street Journal

Many finance chiefs face an unprecedented task in the coming weeks: closing the books on a turbulent first quarter with most or all of their finance staff and auditors working remotely. Communication skills and technological capabilities are being put to the test as companies adapt internal controls and processes to function securely outside of their offices during the coronavirus pandemic.

Proposed SEC Rules Will Hurt Institutions, Main Street Investors
Lorraine Kelly, Morning Consult

As our nation is grappling with the effects of the COVID-19 pandemic, the financial futures of many — if not most — Americans are also top of mind as the markets experience volatility and declines. Moreover, we are approaching the time of year during which the vast majority of public companies hold annual shareholder meetings that allow investors to vote on critical issues affecting millions of Americans’ savings.

Bank dividend payments should be suspended
The Editorial Board, Financial Times

Balance sheets must be reinforced to help cope with disruption.

Jobs Aren’t Being Destroyed This Fast Elsewhere. Why Is That?
Emmanuel Saez and Gabriel Zucman, The New York Times

The coronavirus pandemic is laying bare structural deficiencies in America’s social programs. The relief package passed by Congress last week provides emergency fixes for some of these issues, but it also leaves critical problems untouched. 

Don’t let the coronavirus pandemic burden millions of Americans with bad credit
Ed Mierzwinski and Sabrina Clevenger, USA Today

More Americans filed for unemployment last week than in any week in our history. At 3.3 million, that’s nearly five times as much as the record set in 1982 and far surpasses any week during the Great Recession of 2008-2010. Many of us have friends who have lost their jobs, and they’re more than just numbers. 

How to Avoid Another Great Recession
Greg Ip, The Wall Street Journal

The U.S. economy has suffered a body blow with no modern precedent. Unemployment, just 3.5% in February, could top 10% in coming months, higher than its peak in the 2008-09 recession.

PwC’s COVID-19 CFO Pulse Survey
PwC

Finance chiefs are broadening cost-reduction measures and looking to shift supply chain strategies as a growing majority fear a significant impact on their business from COVID-19 (coronavirus), according to PwC’s latest survey. The findings show that businesses are prioritizing cash spending, while assessing options for financing and/or deeper pullbacks as they look forward toward a recovery time frame.