Wall Street is betting the Federal Reserve will respond to the coronavirus panic by returning to 2008-style interest rates.

Barclays predicted Thursday the Fed will slash interest rates by a full percentage point to zero at next week's meeting -- if not earlier, in an emergency action.

"Given the ongoing weakness in investor sentiment and deterioration in market functioning, we now believe a more aggressive response is warranted," Barclays economists wrote in a note to clients.

It was almost unthinkable just a few weeks ago that the Fed would need to go back to zero in 2020. Now, the market is pricing in a return to zero, not later this year but imminently.

After the Dow suffered its worst day since 1987 on Thursday, the market priced in a 95% chance the Fed cuts rates to a range of zero to 0.25%, according to the CME FedWatch Tool. That compares with no chance of that just a week ago: a truly stunning reversal.

And the Fed is taking other dramatic steps to calm panicky markets. It promised to pump $1.5 trillion into financial markets Thursday and effectively relaunched the 2008-era bond buying program known as quantitative easing, or QE.