But is it enough for the central bank just to take its foot off the brake?
by Geoffrey Smith
Politico
The European Central Bank is set to cut interest rates again next week, determined to do its bit to support an economy beset by a host of problems largely outside its control.
For four years, the ECB has been trying to slow the economy down, raising its key deposit rate to a record 4 percent to choke off inflation, before gradually lifting its foot off the brake since June. Next week’s expected rate cut will be the sixth in the current sequence, and will bring the deposit rate down to 2.5 percent.
But it’s what comes after the Governing Council’s decision on Thursday that is the interesting bit. ECB President Christine Lagarde will be under pressure to communicate clearly where rates will go for the rest of the year, at a time when the changeable rhetoric and actions of U.S. President Donald Trump make clarity effectively impossible.