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ECB: Systemic problems and future headwinds
At the next European Central Bank (ECB) policy meeting in September, it is expected to gently lower interest rates to ease the burden on a stagnant Eurozone economy. However, previous long-term Quantitative Easing (QE) measures, along with a prolonged period of historically low-interest rates calls into question the future ability of the ECB’s toolkit to reinvigorate inflation to its 2% target and defend against future shocks. This creates fears of structural issues within the ECB and the Eurozone. To stave off a Japan-style currency deflation during the Eurozone Crisis, the ECB initiated a bond-buying spree to ... (full story)