Hedge fund manager David Tepper is on CNBC, and he just made an interesting point…The ECB has just given investors another free “put” in Europe, and nobody is talking about it.
Specifically, the majority of the ECB has voted to lower interest rates, although it hasn’t been done.
What it means is that Draghi can now lower rates anytime he wants.
This is the second free “put” given to investors, the first being the ECB’s promise of buying bonds earlier this summer (although the program hasn’t been activated.
Note that Tepper is famous for his take on central bank puts. Back on September 24, 2010, he famously went on CNBC and said the Fed was offering a free put, a call that turned out great, as stocks rallied into the end of the year.