UPDATE: The ECB just cut interest rates by 25 basis points to spur on economic growth amid growing signs of recession in the eurozone.
That revised the ECB’s interest rate target from 1.50% to 1.25%.
It also cut marginal lending rates to 2.00% and the deposit rate to 0.50%.
We’ll hear more about the reasons why at 9:30 AM EST when Draghi speaks from Frankfurt. We’ll be covering that live on Money Game >
PREVIOUSLY: At 8:45 AM EST the European Central Bank and its new president Mario Draghi will release their most recent monetary policy.
Analysts have become increasingly convinced that we’ll see a rate cut — everyone initially expected the ECB to hold rates steady at 1.5% — because of deteriorating economic conditions across the euro area. This cut would be regardless of the fact that inflation in the euro area remains at 3.0%.
The ECB has a single mandate to maintain price stability, but it’s unclear whether the recently inaugurated Draghi will feel as tied to this mandate as his predecessor Jean-Claude Trichet. A rate cut and expansion of sovereign bond-buying would attest to a more activist policy.
The release will be followed by a press conference at 9:30 AM EST.