ECB Finally Shows Signs of Taking Lousy Economic Growth Seriously


In a surprise move, the European Central Bank cut interest rates nearly to zero today And there’s more:

The central bank said that in October it would begin buying asset-backed securities, bundles of loans issued by banks to businesses and households….Perhaps more significantly, Mr. Draghi said that the central bank’s governing council was ready to take further measures if needed — a clear reference to quantitative easing, or broad-based purchases of government bonds or other assets.

“The governing council is unanimous in its commitment to using additional unconventional instruments,” Mr. Draghi said at a news conference….“Q.E. was discussed,” Mr. Draghi said. “A broad asset purchase program was discussed.” He said some members of the governing council favored starting such purchases, but others did not.

More from the Wall Street Journal:

While the ECB had in recent months indicated it was considering an ABS purchase program, the addition of a covered bond program and rate cuts was a surprise, and an indication that officials have grown increasingly concerned that the recent period of very low inflation could persist longer than first thought and may threaten the currency area’s economic recovery.

“In August, we see a worsening of the medium-term inflation outlook, a downward movement in all indicators of inflation expectations,” Mr. Draghi said. “Most, if not all, the data we got in August on GDP (gross domestic product) and inflation showed that the recovery was losing momentum.”

It’s still too little, too late—as usual with the ECB—but at least it suggests that European leaders are finally taking seriously the combination of low inflation and lousy economic growth in the eurozone. More please.

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate