ECB Spectrometer Points to Interest Rate Cut in September

(Bloomberg) -- European Central Bank President Mario Draghi is poised to restart stimulus before the end of his term in October, potentially leaving his successor, Christine Lagarde, to take up the baton if necessary. The Bloomberg Economics ECB spectrometer shows a dovish shift, with policy maker Olli Rehn warning the slowdown isn’t temporary and Klaas Knot saying it is “indisputable” that inflation is too low. BE expects the ECB to change the wording of its forward guidance at Thursday’s meeting to signal imminent easing, followed by a 10 basis point cut to the deposit rate and an announcement on another round of asset purchases in September.

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