The European Central Bank set a new precedent for unconventional post-crisis monetary policy Thursday, cutting one of its main interest rates below zero in an attempt to reverse falling euro zone inflation and stagnant growth.
Investors and analysts had been expecting the move. The bank’s president, Italian economist Mario Draghi, had been hinting for months that the bank would take action to boost inflation, including suggesting in April the possibility of quantitative easing, along the lines of the program that the Federal Reserve has undertaken in the U.S. Like the Fed, the ECB has promised to keep interest rates low for a long time.
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