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The magnitude and timing of the Federal Reserve’s shock and awe Sunday moves to slash its key interest rates to near zero and restart its longer-term Treasury and mortgage-backed securities purchases have few precedents and indicates the severity of the crisis the central bank sees engulfing the U.S. and global economy.

In its highly unusual late Sunday afternoon move, the Fed took clear aim at the coronavirus crisis. In effect, the central bank decided to use all of its interest-rate bullets rather than wait, as businesses, schools and communities are virtually coming to a halt and people are pulling back from a broad range of activities, from traveling to eating out at restaurants.

Those necessary steps to prevent a further spread of the coronavirus also mean, unfortunately, a significant but unquantifiable hit to the incomes of millions of Americans. To give a specific example, think of all the New York City restaurants whose businesses are down massively as the result of Broadway theaters and museums being closed, along with sports events being canceled.

The Fed’s monetary actions, however, have minimal impact on this contraction in economic activity. At most, its actions to ease financial conditions could prevent the disruptions in the Treasury market and the corporate credit market from worsening and exacerbating the inevitable downturn in the economy.

By slashing its federal funds target rate back to the low of 0-0.25% reached after the Great Financial Crisis, and not waiting until its regularly scheduled two-day meeting of the Federal Open Market Committee that concludes Wednesday, the central bank apparently sees a cliff-like falloff in economic activity under way. As I pointed out earlier, economist Joseph Carson likens the current risk to those in the second quarter of 2008, when the gross domestic product contracted at over an 8% annual rate.

The central bank’s actions Sunday are consistent with the possibility of such a sharp, sudden shock to the economy. In the second quarter of 1980, the fed-funds rate fell approximately 1000 basis points, or 10 full percentage points. With Sunday’s cut, the Fed is basically out of basis points.

President Donald Trump Sunday praised the Fed’s move after having been critical of the independent central bank for having raised rates in 2018 and then not having lowered them fast enough in 2019, even including its surprise half-point cut the week before last.

Weekend moves by the Fed have only come during times of extreme distress. The most memorable instance was its dramatic shift to fighting inflation in October 1979 under former Fed Chairman Paul Volcker. When the Plaza Accord was announced in September 1985, it also came on a Sunday afternoon. Unveilings of big policy shifts during the weekend are designed to limit disruptive market impacts though the effectiveness of this tack is limited by the opening of electronic stock futures trading late Sunday afternoon.

In a press conference following the central bank’s actions, Fed Chair Jerome Powell emphasized the need for other fiscal actions, which are necessary to maintain Americans’ ability to keep paying their bills even if they are stuck at home. But he also insisted the central bank has plenty of power with its liquidity tools and all but ruled out moving to negative interest rates, as in Europe and Japan.

The good news is bipartisan support for Congressional action is strong for the legislation passed by the House of Representatives early Saturday morning and likely to be passed by the Senate this week. The measure would provide for a tax credit to small businesses to help pay for sick leave and family leave during the coronavirus crisis. That should boost investor sentiment, Capital Alpha Partners James Lucier writes in a client note Sunday.

The bad news is the Fed’s dramatic actions haven’t buoyed the markets’ confidence—stock-index futures fell sharply Sunday evening. Powell & Co. have acted aggressively to limit financial fallout from coronavirus but clearly cannot fully offset the impact from the economic effects of closing down schools, restaurants and stores. That’s the job of fiscal policy. And the central bank can’t cure a virus.

Write to Randall W. Forsyth at randall.forsyth@barrons.com