This is a shocker.
According to reports, the Bundesbank — Germany’s famously hard-money loving central bank — might be willing to engage in more stimulus if inflation forecasts decline.
The WSJ says the Bundesbank is open to “significant” stimulus, including possibly negative rates.
The euro is diving on the news, though that’s a good thing. It’s been a source of consternation for th Eurozone that the Euro has been so strong against the dollar. A weaker currency would make exports more competitive.
While Germany itself has seen a robust economy, peripheral countries have been at risk of deflation, and by many accounts are badly in need of stimulus.
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