ECB policymakers said to not expect any more stimulus even if outlook worsens

Author: Justin Low | Category: Central Banks

Christine Lagarde has a big test in front of her to bridge the divide

Bloomberg is reporting that policymakers at the ECB don't expect any more monetary easing in the coming months despite a likely downgrade in their economic forecasts in December, according to euro area officials.

Adding that policymakers view the stimulus package in September as being enough to see the Eurozone economy through a slowdown unless it is hit by shocks such as escalating trade tensions or a no-deal Brexit.

There is also the added fact of fervent opposition by some policymakers to the stimulus package and that dampens the odds of more action any time soon, the officials added.

I don't think this comes as too much of a surprise but it just reaffirms that the first task that Lagarde has to overcome is the dividing opinions within the ranks at the ECB.

Meanwhile, there is also the argument that via QE, they have already pushed monetary policy stimulus very close to its limits and will now be looking to respective governments to step up their fiscal game in order to support them.

That's not likely to happen any time soon so if the central bank has to come up with any future decisions over the coming year, it's going to be quite the drama as the hawks continue to push back against more easing measures.

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