ECB Should Keep Its Monetary Options Open This Summer
Policymakers will want to keep their phones close at hand on the hiking trails.
Christine Lagarde, president of the European Central Bank.
Photographer: Bloomberg/BloombergIt's not shaping up to be a relaxing summer at the European Central Bank. Its quarterly economic review on June 5 should come with a widely expected eighth successive 25 basis-point rate cut. That means its deposit rate will have been cut in half over the past year to 2%.
The hawks on the ECB Governing Council are calling for a stop there. But with the intense pressure on the European Union negotiating US tariffs on the struggling export-led economy, the ECB can't expect to simply pause at its July 24 meeting and head for the lounge chairs and hiking trails. All options, monetary and fiscal, have to be kept open, especially with a strengthening euro weighing down the economy.