WASHINGTON (AP) — The Federal Reserve has largely calmed turbulent financial markets. Yet a far tougher task remains: Helping rescue an economy and job market that appear to be free-falling into the worst catastrophe since the Great Depression.

Fed policymakers will meet Tuesday and Wednesday against a backdrop of dismal data: More than 26 million Americans have applied for unemployment benefits since the coronavirus forced widespread business closures. Retail sales have dropped by a record pace. Home sales have plunged.

In the meantime, inflation has started to fall amid the collapse in econo...