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U.S. stock futures and Treasury yields fell early Wednesday, pointing to sustained doubts about the ability of governments and central banks to combat the economic headwinds caused by the coronavirus. Jeff Sparshott here to take you through the latest.

Shock to the System

Businesses are bracing for a longer and steeper coronavirus-triggered downturn than the single-quarter event initially anticipated. The regions hit by the outbreak are experiencing a double whammy. Business operations across Asia, Europe and the U.S. are being disrupted by factory closures, quarantined workers and shortages of components, crimping the availability of goods and services—a so-called supply shock. Meanwhile, postponed public events and mounting fear are causing consumers and businesses to hold back, avoiding travel, restaurants and lavish purchases, even where restrictions haven’t been imposed—a demand shock. The combined effects risk pushing the global economy into a self-reinforcing, downward spiral—a possibility fueling market turmoil and prompting many executives around the world to prepare for darker scenarios than before, James T. Areddy, Tom Fairless and Harriet Torry report.

Economists aren’t forecasting a drawn-out global recession. They expect growth to rebound later this year as long as the epidemic is brought under control. The outlook hinges hugely on China. The world’s second-largest economy looks likely to avoid a recession yet spread enough pain to cause worldwide damage.

WHAT TO WATCH TODAY

The U.S. consumer-price index for February is expected to be unchanged from a month earlier and rise 2.3% from a year earlier. Excluding food and energy, CPI is expected to rise 0.2% and 2.3%. (8:30 a.m. ET)

Treasury Secretary Steven Mnuchin appears on Capitol Hill to discuss the White House’s fiscal 2021 budget proposal at 10 a.m. ET.

On Call With WSJ: What’s Next With Coronavirus and the Markets? Join Economics Editor Nell Henderson and Chief Economics Commentator Greg Ip Wednesday at 11:30 a.m. ET. Register here

U.S. federal budget figures for February are out at 2 p.m. ET.

TOP STORIES

Lower Rates, More Oil

The Bank of England cut its benchmark interest rate in a surprise move aimed at cushioning the U.K. economy from the impact of the coronavirus. At a special meeting of its policy committees, officials agreed to cut the BOE’s benchmark rate to 0.25% from 0.75%. The move comes just hours before U.K treasury chief Rishi Sunak is due to announce tax and spending measures to tackle the virus. The Federal Reserve has already cut interest rates in the U.S. and the European Central Bank is expected to ease policy Thursday as the global economy reels from the novel infection, Jason Douglas reports.

Saudi Arabia fired another salvo in its oil-market war with Russia on Wednesday, unveiling plans to boost its oil-production capacity to a record 13 million barrels a day. The capacity increase comes after the kingdom instigated a price war with Russia, Benoit Faucon and Summer Said report.

The Trump administration is likely to extend the April 15 tax deadline as part of an effort to mitigate the effects of the novel coronavirus on U.S. households and businesses. Extending the tax filing deadline would effectively act as a bridge loan for individuals and businesses facing disruptions from the virus. Treasury officials are still considering how far the filing deadline may be pushed back and who would be eligible for the extension, Kate Davidson, Richard Rubin and Andrew Restuccia report.

President Trump’s push to suspend the payroll tax to boost the economy fell flat on Capitol Hill. Lawmakers of both parties said they preferred targeted measures to assist hourly workers and the battered travel industry, Andrew Restuccia, Andrew Duehren and Richard Rubin report.

Airlines cut more flights, parked planes, froze hiring and reduced executive pay in response to the growing impact of the coronavirus. American Airlines and Delta Air Lines joined United Airlines on Tuesday in slashing the number of flights across their networks, with some cuts extending through the summer, as cancellations overtake new bookings in some markets because of passenger fears about traveling. Airlines are now preparing for the prospect that recovery could take months, rather than the quick bounceback many had initially anticipated, Alison Sider reports.

U.S. efforts to contain the novel coronavirus escalated by the hour on Tuesday. New York set up the country’s first “containment area” around one of the largest clusters of cases in the U.S.; colleges told students not to return campus this spring; and the Democratic presidential candidates canceled rallies in Ohio. The U.S. had 1,025 confirmed cases as of Tuesday night, according to data compiled by Johns Hopkins University, and state officials warned that number would rise, Jennifer Calfas and Chong Koh Ping report.

China has all but declared victory over the disease, after more than 3,100 deaths, as the number of new cases has dropped sharply. Still, the movement of hundreds of millions of people remains restricted.

It’s going to take a few months for official U.S. and European economic data to reflect  fallout from the novel coronavirus. U.S. jobless claims (out each Thursday), consumer confidence surveys (one is due on Friday) and purchasing managers surveys will be among the most timely measures to watch. In the meantime, private-sector data is already showing some emerging trends. At job-search site Indeed.com, for example, more workers are looking for the ability to work from home.

And at Glassdoor, more employers are looking for workers to respond to the epidemic, ranging from nurses and epidemiologists to public health communications and consulting.

Follow the WSJ’s live coronavirus coverage here.

TWEET OF THE DAY

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WHAT ELSE WE’RE READING 

Men and women see inflation differently. The reason? Grocery shopping. “As they undertake the majority of grocery shopping duties for their households, women are exposed to the volatile and large price changes of grocery goods more frequently than men. This differential exposure could explain the higher inflation expectations among women because individuals focus disproportionately more on price increases rather than decreases, and tend to map their perception of current price changes into inflation expectations,” Francesco D’Acunto, Ulrike Malmendier and Michael Weber write in a National Bureau of Economic research working paper.

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