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ECB Ponders Rate Cut As Europe’s Outlook Slides
The European Central Bank agreed to hold interest rates steady today. But President Mario Draghi hints at a future cut because the outlook for Europe’s economy “is getting worse and worse.”
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The European Central Bank agreed to hold interest rates steady as President Mario Draghi frets that the outlook for Europe’s economy “is getting worse and worse.”
ECB has held the prime interest rate near zero for years to help bolster the region’s economic growth. The bank had hoped to gradually raise the rate. But that isn’t likely now.
Instead, Draghi says the ECB also is considering a resumption of quantitative easing, which would pump funds into the economy by buying bonds and other assets.
Draghi notes relative strength in Europe’s construction and services sectors. But he worries about the region’s sagging manufacturing base. He says ECB also is concerned about the threat of U.S. trade tariffs and the prospects of the U.K. leaving the European Union in October with no replacement trade pacts in place.
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