Though the ECB had little choice but to go down this policy road, it and markets will nonetheless need to deal with three major consequences: 1. Even before this recent announcement, ECB policy was providing support to markets. Exacerbating the trend is how ECB bond buying of mostly government and high-quality debt will intensify the already severe shortage of such securities on European markets. Nor can ECB monetary ease overcome Europe’s dysfunctional labor and product policies. Despite such headwinds, this latest ECB effort will do something to lift Europe’s economic prospects.

Source: Forbes October 14, 2019 16:07 UTC