2 Big Questions Ahead Of Today's ECB Meeting

mario draghi ecb president

Photo: AP/Riccardo De Luca

The European Central Bank is about to make a decision on monetary policy at 8:45 AM EST this morning.Italian Mario Draghi just took the helm of the bank earlier this week, and investors will be examining his willingness to deviate from the policies of French predecessor Jean-Claude Trichet.

Two big things will provide evidence that Draghi might be a lot more activist than Trichet:

Will the ECB cut rates? — Investors have been speculating for a while on whether or not Draghi will cut rates from the 1.5% the ECB has been holding them at for months. Consensus is for a December cut, but sooner action has begun to look more likely with negative economic indicators surfacing.

Will it expand or show interest in larger-scale sovereign bond-buying? — The ECB has been hesitant to take on a large role in stemming the eurozone crisis. Stepping up bond-buying in the secondary markets or (gasp!) interest in primary market bond-buying would show the bank’s willingness to shoulder a bigger burden.

The rate cut has been looking more and more likely, though an immediate announcement of expanded bond-buying seems like too much to ask for.

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