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Investors are looking to policymakers to take immediate, forceful action to address the coronavirus pandemic. If the direction of markets is any indication, they have been disappointed with what they’ve seen so far.

Even after the Federal Reserve announced it would inject more than $1.5 trillion into short-term funding markets on Thursday and Friday, major U.S. stock indexes which had been down more than 7%, continued to fall. The Dow Jones Industrial Average closed down 10% — its worst showing since 1987 — and the S&P 500 index was down 5%. Both are in bear-market territory for the year.

The 10-year Treasury yield has been rising since Monday, when it closed at 0.49%. On Thursday, it closed at 0.88%, its highest close since March 5.

The Fed move was done “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” according to a statement from the Federal Reserve Bank of New York.

After the Bank of England cut rates Tuesday and the European Central Bank announced measures on Wednesday to support bank lending and to expand its asset purchase program, the Euro Stoxx 600 index, which tracks the biggest listed companies in the U.K. and eurozone, closed down 11%.

President Donald Trump’s nationwide address Wednesday night to respond to the coronavirus pandemic also failed to calm markets. Trump offered expanded loan capacity for small businesses, tax payment deferral for certain individuals and businesses negatively impacted” by the virus. He also announced a 30-day ban on travelers from Europe for the next 30 days, excluding travelers from the U.K., which infuriated the European Commission, the governing body of the European Union. 

“The coronavirus is a global crisis … and it requires cooperation rather than unilateral action,” the commission said in a statement.

“The market did not hear what they wanted to hear last night,” said Gary Zimmerman, CEO of MaxMyInterest, a cash management platform for individual investors and advisors, who has seen double the traffic by both in the past few weeks.

“This is something of unknown duration,” Zimmerman said.” What are we doing to help businesses and help employees have access to health care and those who don’t go to the doctor because they can’t afford to?” Those are all policy decisions, and lowering [interest] rates will not change much of anything, nor will it reduce the cost of small-business loans.”

“We think things have become sufficiently worse so that a fiscal response is now turning to more of a question of ‘when’ and ‘how’ as opposed to ‘if,’ “ wrote researchers from Morgan Stanley, including strategist Michael Zezas and economists Ellen Zentner and Robert Rosener.

They recommend targeted temporary business tax breaks, expanded federal subsidized business loans and guaranteed bank loans, an increase in food stamp disbursements, temporary Medicaid expansion, longer unemployment benefits, expanded paid leave for workers, additional state and local aid, more infrastructure spending and a 90-day suspension of the payroll tax, which is akin to a similar Trump proposal.

“The market is looking for some type of policy response that might mitigate the economic impact of the coronavirus,“ says Jeffrey Kleintop, chief global investment strategist at Charles Schwab.

The financial crisis of 2008, Kleintop explained, was a financial problem, so the solution had to come from the markets. This time it’s a health problem, so the solution has to come from efforts to contain the virus.  In the interim what’s needed, he says, are “efforts to help businesses have credit lines to keep operating until the health issue is contained. Pandemics tend to end run months, not a year or more.”

In the meantime the economy is probably in a recession, Gary Shilling said on Bloomberg Radio, noting that even before the coronavirus hit, the U.S. and global economy, including China, were already slowing. “Take a slowing economy and then create the shock of the coronavirus. That’s what has put us into recession.”

Richard Bernstein, the CEO and chief investment officer of Richard Bernstein Advisors, agrees with Shilling that the global economy was already faltering before the virus hit. The pandemic is a “black swan” event that caused a bear market because the fundamentals were already deteriorating, said Bernstein in a conference call Wednesday.

U.S. GDP was growing below average for three straight quarters, corporate profit growth was slowing and U.S. small-cap stocks and global stocks were already in a “deep profit recession,” said Bernstein. The big drop in oil prices only added to market worries.

He advises investors not to panic and to have “an immense amount of patience,” saying “the fundamentals will turn much more slowly than investors expect.”

On Capital Hill, congressional Democrats and Trump administration officials were negotiating Thursday afternoon on an economic relief package to blunt the economic impact of the coronavirus pandemic. House and Senate leaders vowed to forgo next week’s scheduled recess in order to work on a legislative response to the coronavirus outbreak. 

Trump is considering declaring a national emergency, which would free up funds to combat the economic and health care fallout from virus.

— Check out Trump Mulls Declaring National Emergency Over Coronavirus; House Readies Aid Bill on ThinkAdvisor.