Now that the European Central Bank has stoked expectations of additional monetary stimulus, there is a risk that interest rates will snap back upward if it doesn’t deliver at its meeting on September 12. But the ECB would be better advised to postpone any significant further policy loosening.
ZURICH – With economic sentiment in the eurozone worsening rapidly, the European Central Bank is widely expected to announce a robust package of additional stimulus measures at its next meeting on September 12. But although the ECB’s monetary policy has in general been insufficiently expansionary (reflected by persistently below-target eurozone inflation), now is not the right time for fully-fledged monetary-policy easing, including a return to quantitative easing (QE).
ZURICH – With economic sentiment in the eurozone worsening rapidly, the European Central Bank is widely expected to announce a robust package of additional stimulus measures at its next meeting on September 12. But although the ECB’s monetary policy has in general been insufficiently expansionary (reflected by persistently below-target eurozone inflation), now is not the right time for fully-fledged monetary-policy easing, including a return to quantitative easing (QE).