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ECB Rate Cut Is Weapon of Choice as Draghi Threatens Action

  • Officials said to see rates rather than QE as initial tool
  • Fed interest-rate cut could also become trigger for ECB action
Bloomberg business news
Matt Miller reports on the ECB’s plan for interest rate cuts.Daybreak: Americas." (Source: Bloomberg)
Updated on

European Central Bank policy makers anticipate using an interest-rate cut as their first stimulus move if they need to act again to boost inflation, according to three euro-zone central bank officials.

Lowering borrowing costs further below zero would be the most likely initial step rather than resuming asset purchases, said the officials, whose alarm at the descent of market inflation expectations to a record low is nudging them all toward favoring action. They didn’t want to be identified, citing the confidentiality of such discussions. An ECB spokesman declined to comment.