Trump says OPEC has not asked him for a U.S. oil production cut By Reuters


© Reuters. U.S. President Trump leads daily coronavirus response briefing at the White House in Washington

By Jeff Mason

WASHINGTON (Reuters) – President Donald Trump said on Monday that OPEC had not pressed him to ask U.S. oil producers to reduce their output to support global prices, which have been hard-hit by the economic fallout of the coronavirus pandemic.

Trump said U.S. oil production had already fallen, anyway.

“I think it’s happening automatically but nobody’s asked me that question yet so we’ll see what happens,” the president told a press briefing Monday afternoon.

Major oil producers including Saudi Arabia and Russia are likely to agree to cut production at a Thursday meeting but only if the United States joins the effort, three sources involved told Reuters on Monday.

“Without the U.S., no deal,” one of the sources said.

Worldwide oil demand has dropped by roughly 30%, or about 30 million barrels a day as the coronavirus pandemic brings the world economy to a standstill, at the same time that Saudi Arabia and Russia have been flooding markets with extra supply.

That has been a major problem for the economy of the United States, which has grown into the world’s largest oil and gas producer, because it has threatened the once-bustling drilling industry with layoffs and bankruptcies.

Several U.S. drilling companies have already scaled back production because of the drop in oil prices, which have lost around two-thirds of their value so far this year.

Last week, in response to the weeks-long market rout, the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, started talking about cutting production, but they want other non-OPEC nations to participate, particularly the United States.

The renewed discussions among members of OPEC+ began after Trump pressured Riyadh and Moscow to make a deal in a series of phone calls. Trump said last week he had made no concessions and did not agree to a U.S. production cut.

Normally any coordinated decision by U.S. oil producers to reduce output to boost prices would violate antitrust laws.

But if the federal government leads the charge such an effort would arguably be legal, according to Barbara Sicalides, an antitrust expert at Pepper Hamilton LLP.

(Aditional reporting by Diane Bartz; Editing by Richard Valdmanis, Sandra Maler and Sonya Hepinstall)

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Airbus weighs sharp cut in A320-family jet production: sources By Reuters


© Reuters. The logo of Airbus is pictured at the aircraft builder’s headquarters of Airbus in Colomiers near Toulouse

PARIS (Reuters) – Airbus is studying a sharp cut in narrow-body production rates to accommodate industrial and delivery problems triggered by the coronavirus crisis, three people familiar with the matter said.

Two of the people said Airbus may have to reduce its official monthly rate of 60 A320-famiy jets by as much as half for one or two quarters to avoid a glut of undelivered jets. The third said no decision had been taken on a reduced figure.

An Airbus spokesman declined to comment, but said the company was in constant dialogue with suppliers and airlines.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



BP will not cut jobs over next three months: CEO Looney By Reuters


© Reuters. BP’s new Chief Executive Bernard Looney gives a speech in central London

(Reuters) – Oil major BP PLC (L:) will not cut jobs over the next three months, Chief Executive Officer Bernard Looney said, even as the company seeks to reduce spending following an oil price crash.

Looney wrote in a LinkedIn (NYSE:) post on Friday while there has been reduced demand for the industry’s products, the company’s response to the crisis “will not include making any BP staff redundant over the next 3 months.”

World’s major oil companies, including BP, have said they would reduce spending following a plunge in crude prices due to the coronavirus pandemic and a price war between top producers Saudi Arabia and Russia. BP, however, has not given a specific figure.

London-based BP employs 73,000 people across several countries.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Canada’s top lenders cut prime rates after central bank’s surprise move By Reuters


© Reuters. The Royal Bank of Canada logo is seen outside of a branch in Ottawa

TORONTO (Reuters) – Canada’s top lenders lowered their prime rates by 50 basis points on Friday, hours after the central bank unexpectedly cut its key interest rate to help the county weather the economic fallout of the coronavirus pandemic.

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia , Bank of Montreal and Canadian Imperial Bank of Commerce all cut their prime rates to 2.45%, effective March 30.

The Bank of Canada cut its overnight interest rate by 50 basis points to 0.25%, its lowest level since June 2010 and the third cut in March.

Separately, Canada’s financial regulator eased its capital and liquidity requirements for banks, changed credit loss provisioning and allowed more loans to be securitized.

The pandemic has forced several governments to take actions as businesses grind to a halt and several retailers close stores to curb the spread of the highly-contagious diseases, leaving many people jobless.

To date, Canada has reported 4,689 coronavirus cases and 53 deaths.

The U.S. Federal Reserve has also cut interest rates twice in less than two weeks in March, emergency moves to help shore up the economy in the face of the damage caused by the virus.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Factbox: Global oil, gas producers cut spending after crude price crash


(Reuters) – Oil and gas companies are cutting spending plans in response to the new coronavirus and a push by Saudi Arabia and Russia to ramp up output.

FILE PHOTO: A long exposure image shows the movement of a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 23, 2019. REUTERS/Angus Mordant

International benchmark prices LCOc1 have more than halved since the start of the year, falling to around $25 a barrel.

North American oil and gas producers have cut capital spending by about 30% on average, data compiled by Reuters showed.

Below are plans announced by top energy companies (in alphabetical order):

AKER BP

Norwegian Aker BP (AKERBP.OL) will postpone non-sanctioned projects to cut its planned 2020 capital and exploration spending by 20% due to the coronavirus but maintains its production guidance. Capital spending for this year would be reduced to $1.2 billion and exploration spending to $400 million, while in 2021-2022 it expects capital spending to be “well below” $1 billion. The company said its ambition to continue paying dividends “remained firm”, but the board still had to assess the situation.

BPBP Plc (BP.L) said it planned to reduce capital and operational spending, which was about $15 billion last year.

CHEVRON

Chevron Corp (CVX.N) said it aimed to trim spending and lower oil output in the near term. The oil major’s 2020 organic capital expenditure guidance had been $20 billion.

DNO

Norway’s DNO (DNO.OL), which operates in Iraq’s Kurdistan region, said it would cut its 2020 budget by 30% or $300 million and lower its dividend for the first half of the year.

ENERGEAN

Mediterranean gas group Energean (ENOG.L) said it would cut its investments by $155 million in Greece and Israel and could reduce its budget for Egypt by another $140 million if needed without endangering delivery of its long-term offtake deals.

ENI

Eni (ENI.MI) followed rivals by cancelling a share buyback and sharply cutting investments. It said it would withdraw plans it had to buy back 400 million euros ($433.84 million) of shares this year, adding it would reconsider a buyback when Brent was at least $60 per barrel.

ENQUEST

North Sea producer EnQuest (ENQ.L) aims to break even this year at $38 a barrel and does not expect to restart its Heather and Thistle/Deveron fields, which produced 6,000 barrels of oil equivalent per day (boepd) last year.

It is cutting operating costs by 30% to $375 million and investment will be lowered by $80 million to $150 million, which is expected to reduce output next year.

EQUINOR

Norway’s Equinor (EQNR.OL) has suspended its ongoing $5 billion share buyback program and said it would cut total 2020 spending by around $3 billion, including capital spending reduction to $8.5 billion from previous plans of $10-11 billion, with drilling and completion activities being postponed in the U.S. onshore.

EXXONMOBIL

ExxonMobil Corp (XOM.N) said it would make significant cuts to spending. It had previously budgeted $30 billion to $33 billion for projects in 2020.

GENEL

Genel Energy Plc (GENL.L), which operates in Iraq’s Kurdistan region, said it could generate excess cash at a sustained oil price of $40 a barrel, would be resilient with an oil price of $30 a barrel and will continue to pay a dividend of $0.10 a share.

It said it could reduce investments to $60 million this year, but expected the number to be $100 million, below previous guidance of $160-$200 million. Its production costs are $3 a barrel.

It has yet to receive payments from local authorities for production in October and November.

GULF KEYSTONE

Kurdistan-focused producer Gulf Keystone suspended some of its drilling activities in the northern Iraqi region.

KOSMOS ENERGY

Kosmos Energy Ltd (KOS.N) has suspended its dividend and said it aimed to reduce 2020 capital spending by 30% with a view to becoming cash-flow neutral with an oil price of $35.

LUNDIN PETROLEUM

Lundin Petroleum (LUPE.ST) has decided to cut its proposed dividend for 2019 by 44%, and said it was cutting its total 2020 capital, exploration, decommissioning and G&A spending by an initial $170 million or around 13%.

OIL SEARCH

Papua New Guinea-focused Oil Search Ltd (OSH.AX) cut its 2020 investment by 38% and capital spending by 44%.

PREMIER OIL

Premier Oil Plc (PMO.L) said it had identified at least $100 million in potential savings on its 2020 capital spending plans.

Premier expects to be broadly cash-flow neutral in 2020, assuming a $100 million reduction in planned 2020 capital spending and a $35 oil price for the rest of the year.

SANTOS

Santos Ltd (STO.AX), Australia’s No. 2 independent gas producer, said it was reviewing all its capital spending plans and would stop all hiring.

SAUDI ARAMCO

Saudi Arabia’s state-run oil company Saudi Aramco (2222.SE) said it planned to cut capital spending for 2020 to between $25 billion and $30 billion, compared with $32.8 billion in 2019.

ROYAL DUTCH SHELL

Shell (RDSa.L) lowered capital expenditure for 2020 by about $5 billion on Monday and suspended the next tranche of its share buyback plan, as the company tries to weather a hit from the recent oil price crash.

TOTAL

Total (TOTF.PA) said that with prices of $30 per barrel, it would now target organic capital expenditure cuts of more than $3 billion, mainly in exploration. The company will also target $800 million in 2020 operating cost savings compared to 2019, instead of the $300 million previously announced, and suspend its outstanding $1.5 billion share buyback program.

TULLOW OIL

Tullow Oil Plc (TLW.L) said it would cut its investment budget by about a third to $350 million this year and reduce exploration spending, historically the group’s focus, by almost half to $75 million.

It said the oil price fall might jeopardize a plan to sell $1 billion in assets to refill its coffers, raising the risk the group’s lenders could become reluctant to approve loans essential to shoring up its future.

WINTERSHALL

Wintershall Dea said it would cut 2020 investment by a fifth to 1.2 billion to 1.5 billion euros ($1.3 billion to $1.7 billion) and suspend its dividend until further notice.

Reporting by Ron Bousso, Sonali Paul, Shadia Nasralla, Nerijus Adomaitis; Editing by Jason Neely, Kirsten Donovan and Ken Ferris



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Halliburton to ‘significantly’ cut 2020 capex below $1.2 billion budget


(Reuters) – Oilfield services firm Halliburton (HAL.N) is accelerating its cost-cutting and will significantly reduce spending this year below its original $1.2 billion budget, its finance chief said on Tuesday.

The Houston, Texas-based company did not disclose a new spending target, but is testing scenarios including a 60-65% reduction in some areas of the oilfield services sector, Chief Financial Officer Lance Loeffler told investors on a webcast. He pointed to a reduction to $800 million done during the last downturn that began in late 2014 as a potential target.

Crude oil prices have more than halved since the start of the year as the spread of coronavirus slashes demand, and after Russia and Saudi Arabia launched an unanticipated price war. On Tuesday, U.S. crude futures CLc1 were trading at $23.72 a barrel. [O/R]

“The industry is facing an unprecedented dual impact on demand and supply side that none of us have witnessed over our professional lifetimes,” Loeffler told investors.

Halliburton had already been cutting cost by idling equipment and laying off workers. Last week, it said it would furlough 3,500 workers for two months.

“All options are being considered,” Loeffler said.

He emphasized that Halliburton would focus on returns and free cash flow, rather than slashing prices to gain or hold onto market share, as the company did in the last downturn.

He said one reason Halliburton was taking a different strategy this time was because financing from Wall Street had dried up for the oil and gas industry.

“There is no more lifeline,” he said.

Shares of Halliburton were up 24.4% on Tuesday to $6.52. They are down 72% from the beginning of the year.

Reporting by Gary McWilliams; Editing by Chizu Nomiyama and Marguerita Choy



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SoftBank plans $41 billion of asset sales to expand buyback and cut debt


TOKYO (Reuters) – SoftBank Group Corp (9984.T) plans to raise as much as $41 billion to buy back shares and reduce debt in an unprecedented move to restore investor confidence as a financial market rout pummels its shares and its portfolio companies.

The Japanese tech conglomerate’s plans come as it contends with a growing financial squeeze on the company and its $100 billion Vision Fund, which has recorded two consecutive quarters of losses after its tech bets fell short, compounded by the coronavirus pandemic’s impact on the global economy.

Its shares jumped 19% for their biggest daily gain in nearly 12 years after the pledge to sell or monetize up to 4.5 trillion yen ($41 billion) of assets to buy back 2 trillion yen of its shares in addition to a buyback of up to 500 billion yen announced earlier this month.

The buyback tops the $20 billion of purchases sought by activist investor Elliott Management, which has put pressure on SoftBank to improve shareholder returns, and will retire 45% of the group’s shares.

The asset sale will be executed over the next four quarters.

“This will allow us to strengthen our balance sheet while significantly reducing debt,” Chief Executive Masayoshi Son said in a company statement without specifying what will be sold.

SoftBank’s share price has been hammered by investor scepticism over the outlook for Son’s bets on start-ups such as WeWork and Uber (UBER.N).

Its plans to fund the initial 500 billion yen buyback with debt was received negatively by analysts and investors who were concerned by Son’s willingness to leverage the company.

Beyond the share buyback, proceeds will be used for repaying debt, buying back bonds and boosting cash reserves, reflecting Son’s “firm and unwavering confidence” in the business, the company said in the statement.

ASSET SALES

Given the current market fragility, SoftBank may look to monetize its stakes in the merged Sprint (S.N) and T-Mobile US (TMUS.O) or Chinese e-commerce giant Alibaba (BABA.N), said Redex Holdings analyst Kirk Boodry.

Son previously offloaded part of the stake in Alibaba, of which SoftBank owns 25%, in a complicated transaction ahead of the 2016 purchase of chip designer Arm.

Monday’s announcement comes after SoftBank’s conglomerate discount – the difference between its market capitalization and the value of its assets – yawned to a record 73% last week.

“That’s a wake-up call that investors are really worried,” Boodry said, overriding Son’s previous reticence to slim the portfolio.

High on the list of pressing problems is a fight brewing over a major soured bet on co-working start-up WeWork, with SoftBank considering pulling out of a $3 billion bid to buy additional shares.

REDUCED OPTIONS

SoftBank’s financing options are becoming increasingly constrained, however, as domestic banks hit internal limits for lending to the highly leveraged group.

Last month it pledged almost a third of its stake in domestic telecoms company SoftBank Corp (9434.T) to raise up to $4.5 billion from 16 financial institutions.

The telecoms business is viewed by analysts as another candidate for asset sales. [L4N2BG1PX])

The cost of insuring SoftBank against default SFTB5YJPAC=MG, which spiked to at least five-year highs last week, fell on the news.

FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File Photo

The group’s shares closed almost 19% up on Monday but remain down 33% this year.

($1 = 110.3900 yen)

Reporting by Sam Nussey; Editing by Muralikumar Anantharaman and David Goodman



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U.S. lawmakers ask Interior to cut offshore oil royalty rates due to market slump By Reuters


© Reuters.

WASHINGTON (Reuters) – Lawmakers representing U.S. Gulf coast states on Friday asked Interior Secretary David Bernhardt to temporarily cut the royalty rate oil and gas companies must pay on their offshore drilling operations to help the industry weather a market crash.

“Such an action in the short term will help mitigate a price war that is sinking prices and decreasing production,” the 14 lawmakers said in a letter to Bernhardt dated Friday and seen by Reuters. The congress members represent Gulf coast districts including in Texas and Louisiana.

A long list of businesses have been seeking assistance from the White House and the U.S. Congress to counter the impact of the global pandemic, which has infected more than a quarter of a million people worldwide, decimating travel and forcing massive disruptions in daily life.

The economic fallout of the outbreak combined with a price war between major oil producer nations Saudi Arabia and Russia has triggered a slump in crude oil prices () that threatens the once booming U.S. drilling industry.

The American Petroleum Institute on Friday asked for additional regulatory relief from President Donald Trump, including on things like waivers for seasonal fuel requirements, a suspension of non-essential inspections and audits, and certain leasing and permitting considerations.

The lawmakers said in their letter that Bernhardt has the authority to waive or suspend royalties on existing leases under federal laws covering the Outer Continental Shelf. There is a 12.5% royalty rate for leases in water depths of less than 200 meters and a royalty rate of 18.75% for all other leases. The rate has been unchanged for more than a century.

A spokesperson for the Department of Interior did not immediately respond to a request for comment.

Firing up offshore drilling has been a crucial part of Trump’s “energy dominance” agenda to maximize domestic production of crude oil, and coal.

On Wednesday, a major sale of oil and gas leases in the U.S. Gulf of Mexico generated $93 million in high bids, the lowest total for any U.S. offshore auction since 2016, reflecting caution in the drilling industry amid a steep slide in oil prices.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Dollar weakens after another surprise Fed rate cut By Reuters


Dollar weakens after another surprise Fed rate cut

By Stanley White

TOKYO (Reuters) – The dollar fell against a broad range of currencies on Monday after the U.S. Federal Reserve made another surprise interest rate cut and major central banks took steps to relieve a shortage of dollars in financial markets.

The U.S. Federal Reserve cut rates to a target range of 0% to 0.25% and said it would expand its balance sheet by at least $700 billion in coming weeks.

Five other central banks also cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets.

The moves come as policymakers respond to a brutal months-long sell-off in financial markets due to worries about the economic impact of the global spread of the coronavirus.

“It’s a modest negative reaction for the U.S. dollar. The Fed moved a little sooner and a little more aggressive that some thought,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

“This cannot prevent the economic fallout from social distancing (used to slow the coronavirus). That will require some fiscal spending and something from the government to make sure small companies are funded.”

The dollar fell 1.5% to 106.35 yen early on Monday in Asia in reaction to the Fed’s move, which was announced on Sunday evening U.S. time.

The greenback also fell 0.9% to $1.2405 per British pound .

Against the euro (), the dollar slid 0.3% to $1.1153.

The dollar fell 0.3% to 0.9507 Swiss franc .

The Fed, the Bank of Canada, European Central Bank, the Bank of England, the Bank of Japan (BOJ) and Swiss National Bank also agreed to offer three-month credit in U.S. dollars on a regular basis and at a rate cheaper than usual.

The move was designed to bring down the price banks and companies pay to access U.S. dollars, which has surged in recent weeks as a coronavirus pandemic spooked investors.

The Fed had already cut interest rates by half a percentage point on March 3 at an emergency meeting, the first emergency cut since the financial crisis in 2008, but that move failed to stem market volatility.

The Fed’s move on Sunday U.S. time was likely aimed at staving off what had the potential to be another volatile week in financial markets, analysts say.

However, U.S. stock futures plunged after the rate cut, suggesting investors remain nervous.

Later on Monday, China will release several important economic indicators that should reveal the scale of damage caused by coronavirus, which emerged in the central Chinese province of Hubei late last year.

The Fed was originally scheduled to announce a policy decision on Wednesday, and the BOJ holds a two-day meeting ending Thursday, and the pressure has been on central banks to do something to restore calm to financial markets.

Worries that travel restrictions and factory closures aimed at containing the coronavirus will cause a global recession have sent equities into a tailspin.

In the offshore market, the yuan edged up slightly to 7.0131 per dollar as traders awaited key Chinese economic data.

The Reserve Bank of New Zealand joined the global easing race with a cut of 75 basis points to its rates, while the Reserve Bank of Australia added A$5.9 billion to the banking system through market repo operations.

The New Zealand dollar fell 0.2% to $0.6045, while the Australian dollar fell 0.38% o $0.6164.



Investors hope Fed can help calm markets as big rate cut expected By Reuters


© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) near the close of trading in New York

By Lewis Krauskopf

NEW YORK (Reuters) – Interest rate cuts won’t cure the coronavirus but investors are still hoping the Federal Reserve can take some actions to help soothe the roiled stock market.

Only days after a rare emergency rate cut, the Fed is expected at its regularly scheduled meeting next Wednesday to slash its target rate another 75 to 100 basis points to near zero, according to the CME FedWatch website.

The U.S. central bank also may announce measures to ensure sufficient liquidity and lending or to purchase assets by restarting the quantitative easing that the Fed employed during the financial crisis.

A move like that could offer some comfort to investors after Thursday’s bruising decline, in which the notched its biggest one-day drop since 1987.

“If the market feels the Fed is responding appropriately and is helping investors and consumers, and feel like somebody is in charge, maybe that can help settle things down,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

Indeed, stocks briefly pared losses on Thursday after the New York Fed said on it will introduce $1.5 trillion in new repo operations this week and start purchasing a range of maturities as part of its monthly Treasury purchases. But the rebound was short lived and the ended down 9.5% on the day.

Expectations for a more significant rate cut have increased this week as the market decline deepened over fears about the economic fallout of the coronavirus crisis. As of Thursday, the S&P 500 had fallen more than 26% from its Feb. 19 record closing high, including a drop of more than 16% so far for the week.

Traders currently expect the Fed to cut its target rate from its current range of 1-1.25% to as low as 0-0.25%. Some market watchers wonder if the central bank could even eventually go into negative territory.

“Central banks must bolster confidence that they are willing to test the limits of where they view the effective bound on rates,” JPMorgan Chase (NYSE:) economists said in a note this week.

Markets will respond “poorly” should the Fed fail to cut rates, said Nela Richardson, investment strategist at Edward Jones, but added that “the risk of aggressive action now is that you sacrifice valuable ammunition in the short term to boost short-term market sentiment.”

“You might need the ammunition further down the road if unemployment increases or deflation starts,” Richardson said.

Of course, rate cuts may not help equities. The S&P 500 ended up falling 2.8% on March 3 despite the Fed’s surprise half-percentage point cut, which boosted sentiment but also led investors to speculate on what other actions the Fed could take.

Boston Fed President Eric Rosengren said last week that the central bank needed “to think broadly about what tools we would use” if the virus continues to weigh, and that it “could be important” to let the Fed buy assets other than U.S. Treasury and mortgage-backed securities.

Such asset purchases aimed at stimulating the economy, known as quantitative easing (QE), were a key tool used by the Fed to emerge from the 2007-2009 financial crisis.

“Should the Fed gauge that reducing rates is not providing for easier financial conditions, we expect it to quickly turn to quantitative easing,” Morgan Stanley (NYSE:) economists said in a note.

Whatever actions the Fed takes, some investors said they are ultimately secondary to the responses of the world’s governments.

In the United States, partisan gridlock threatens to derail the government’s ability to contain the economic damage. Democrats in the House of Representatives have unveiled a plan that would expand programs including food assistance and unemployment aid. The Republican-led Senate will delay its recess to work next week on its own legislation.

“While we think central bank policy is important, we think the fiscal is much more important at this stage,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.