It May be Too Little Too Late for ECB

The European Central Bank unleashed a surprisingly aggressive stimulus plan on Thursday that looked like the last, best hope to prevent the region from sliding toward another lost economic decade with the stagnant growth, high unemployment and political strains that it would mean.

But the 1.1 trillion-euro question is whether the bond-buying program will jolt Europe out of its economic doldrums or merely create a short-term lift to financial markets. The flood of new money sloshing around the global economy could also create problems elsewhere.

“The E.C.B. will succeed in weakening the euro and maintaining generally low interest rates,” said Mohamed A. El-Erian, the chief economic adviser at the financial services company Allianz. “But this is insufficient to deliver a growth breakthrough,” he added, and “comes with the risk of collateral damage and unintended consequences.”

NY Times

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.