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ECB Preview: Worries Increase but Not Quite Ready to Act
The ECB meets Thursday, and it may be best conceived as a transition meeting. It will lay the rhetorical groundwork for two things: a likely downgrade to the staff's growth forecasts and moving toward a new round of long-term loans (targeted long-term refinance operations). Draghi's speech last week to the European Parliament anticipated the themes he can be expected to develop in his press conference on Thursday. The euro area economy is weaker than expected, and it can last longer than anticipated. The economy continues to require extensive support, just not net new asset purchases. Nevertheless, with a firm labor ... (full story)