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ECB may surprise and do nothing; BOE will extend QE
After the June 6th meeting of the ECB Governing Council, President Draghi let it slip that, “a few members” had pushed for a rate cut. This lead the market to assume that the steadily worsening Eurozone economic landscape would force the ECB to bite this bullet at its meeting Thursday. I feel, however, there is a non-trivial chance that this won't be forthcoming. The Council will have fears that the potential damage a near-zero interest rate environment could do to the normal functioning of the interbank money markets outweighs the marginal benefit that might accrue from a tiny reduction in rates. After all, ... (full story)