FRANKFURT—European Central Bank President Christine Lagarde sounded an optimistic note on the eurozone’s economy and played down concerns over the recent strength of the euro, sparking a rally in the common currency and stirring questions as to whether the bank will provide a fresh round of stimulus to support the region’s stuttering recovery. However, analysts warned that the ECB might be too sanguine at a time when Covid-19 cases are surging across the continent and eurozone inflation has fallen below zero. “We can’t help but feel that the ECB just missed an opportunity to remain ahead of the...curve,” said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva. The ECB has used its policy tools aggressively since March, unveiling some $3 trillion of stimulus that roughly kept pace with the Federal Reserve. Its actions helped to pin down borrowing costs for indebted governments in southern Europe and keep credit flowing.

Source: Wall Street Journal September 10, 2020 11:55 UTC