Global financial system

Trump goes after ECB as euro drops against the dollar

President Trump attacked European Central Bank (ECB) President Mario Draghi in a Tuesday tweet after he signaled that he may lower interest rates as soon as next month, causing the euro to drop against the dollar.

The big picture: Trump has been waging a war with his own central bank, blurring the lines of the Federal Reserve’s political independence by calling on it to cut interest rates. Now, Trump is picking a fight with the ECB, one of the major central banks that has hinted at easing monetary policy as the global economy slows. The Fed is one of the few that has yet to make that pivot, though speculation abounds that it may indicate this week that a rate cut is coming.

The return of quantitative easing

Bank of Japan governor Haruhiko Kuroda at the G20 finance ministers and central bank governors meeting in Japan. Photo: Eugene Hoshiko/AFP/Getty Images
Bank of Japan Governor Haruhiko Kuroda at the G20 finance ministers' and central bank governors' meeting in Japan. Photo: Eugene Hoshiko/AFP/Getty Images

After pulling back from what was expected to be the year for global central bank policy tightening in January, policymakers are now giving markets a clear signal that they intend to start cutting interest rates, pouring stimulus on the economy. But analysts are skeptical the same song and dance will work this time.

What's happening: The Fed has signaled it will likely cut this year, while central bankers in Australia, New Zealand and India already have cut rates to historic lows with markets expecting more.