European Central Bank launching stimulus program to shore up economy
- Courtenay Brown, author of Axios Macro
Mario Draghi leaving an ECB press conference in July. (Photo: Arne Dedert/Picture Alliance via Getty Images)
The European Central Bank announced a series of measures Thursday in an effort to help worsening economic conditions and low inflation in the euro zone, including cutting interest rates by 10 basis points to negative 0.50% (signaling even lower rates may be coming) and re-starting its bond-buying program "as long as necessary."
Why it matters: This is one of the most contentious and important policy decisions for outgoing ECB president Mario Draghi, who is facing doubts from economists about the effects of moving rates further below zero. His successor is vowing to look at the “costs and benefits“ of negative rates, while others are critical that re-starting quantitative easing is too aggressive.