How it works: The Federal Reserve is a good example of a U.S. agency that has tried to err on the side of doing too much too soon. It slashed interest rates on March 3, two weeks before its scheduled meeting, and then brought them down to zero during the weekend of March 15, along with a passel of other actions copied and pasted from the 2008 financial crisis handbook.
The Fed even backstopped money market funds on Thursday, despite the fact that they are currently experiencing inflows and need no such backstop. Better safe than sorry.
The bottom line: When Italy quarantined 16 million people on March 8, it felt like an extreme measure. Now that Italy’s COVID-19 death toll has surpassed China’s, it doesn’t look so extreme.
No one is harmed by doing too much too early.