Goldman Sachs economists are out with a note saying more ECB action is a higher probability than not. By June, they see a 40% chance of a cut, which would rise if the euro rallies or inflation data is unexpectedly low.
Goldman has consistently been calling for cuts and has been wrong (or early) so far.
They see unconventional moves like QE as less likely and say extraordinary action would require a ‘substantial deviation’ from the forecast baseline. They believe an asset purchase program would be targeted at a specific market segment to support easier credit rather than broad bond buying.
