If Mario Draghi wants to have a significant market impact after Thursday’s European Central Bank meeting, he better not think small. The financial world’s collective gaze will be focused on the ECB president after the session, during which policymakers are expected to launch a U.S.-style quantitative easing program aimed at injecting liquidity into the sputtering euro zone economy, and goosing asset prices in the process.
History, at least that generated by the Federal Reserve’s historically ambitious three rounds of QE, would suggest that the initiative would boost stocks, commodities and bond yields and, hopefully, generate some real economic growth.
However, that’s likely dependent upon how aggressive Draghi wants to get with the ECB’s version of QE, and specifically whether it can shock a market that already is well aware of the plan.
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