As Stock Markets Tumble Because Of Coronavirus, This Time Feels Different

The coronavirus panic that sent stock markets tumbling this week has triggered calls for the federal government to intervene, relying on traditional playbooks that the Federal Reserve, Congress and the White House have used in numerous previous crises.

This time, though, the usual approach might not work.

Typically, the Fed responds to economic trouble by lowering interest rates to make credit easier to obtain. It also can offer loans to banks via the “discount window” or buy large quantities of U.S. Treasury securities to offset any general tightening in financial conditions. Congress, meanwhile, can approve new spending or tax cuts to flood the economy with money.