ECB Weighing QE

Europe is in the throes of a critical debate about whether it should embark on an American-style quantitative easing program and is looking to the U.S. for answers about how and if the measure would work on the Continent.

The debate heated up after European Central Bank President Mario Draghi in Jackson Hole, Wyoming, last week noted that inflation expectations have been falling, and said the ECB’s Governing Council “will acknowledge these developments” at its meeting this week and “within its mandate will use all of the available instruments needed to ensure price stability over the medium term.”

That, in turn, raised expectations for further action, if not this week, then in the months ahead.  “They need to do shock and awe,” said former Fed Governor Rick Mishkin, instrumental in helping form the U.S. QE policy. “They are so far behind the curve.” Mishkin said a QE program would be seen by markets as a commitment by the central bank to reflate the economy and would have positive effects on growth and employment.

CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.