Central Banks Fight the Threat of Recession

October 16, 2019 | Jacob Fondrk, Performance Analyst, David Hernandez, CFA, Senior Research Analyst, Non-U.S. Equities

On September 12th, the European Central Bank (“ECB”) — headed by departing President Mario Draghi — passed a major stimulus package fueled by a key interest rate cut and a large bond repurchase program. The ECB deposit facility rate, which is used by banks to make overnight deposits, was lowered 10 basis points to -0.5%, a new record low. The newly approved quantitative easing program is set to begin on November 1st. It will involve the ECB buying over 20 billion euros worth of Eurozone government bonds on a monthly basis with the intention of increasing the money supply, thereby lowering interest rates and encouraging growth.

Though this move by the ECB did not receive unanimous approval by voting members, it was implemented with the hopes of stemming an increased slowdown in Europe and fighting against the threat of recession. One indicator of the Eurozone slowdown has been PMI numbers, which dropped again in September, remaining in contraction territory. This trend began at the start of 2018 with the crossover into negative growth occurring early this year.

Similar though slightly better numbers have been seen in the United States over the past few months, and it is widely expected that the Fed will continue monetary easing by cutting rates one more time in 2019, either at the end of this month or the end of the year. As trade tensions and market uncertainties persist, the ECB, Federal Reserve, and central banks across the world are fighting to maintain growth and avoid a global recession.

Print PDF > Central Banks Fight the Threat of Recession

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Jacob Fondrk
Performance Analyst

Get to Know Jacob

David Hernandez, CFA
Senior Research Analyst, Non-U.S. Equities

Get to Know David

Related Content


Should Investors Worry About the Growing Deficit?

Americans have seen tax cuts and strong historical returns across asset classes since the Global Financial Crisis. However, though the…


Will Argentina’s New President Drive Losses for Hedge Funds?

When Argentina President Mauricio Macri was elected in 2015, he brought along a pro-business agenda, which reopened the country’s financial…


Live Videos: 2019 Investment Symposium Presentations

The six flash talks by our research team at Marquette’s 2019 Investment Symposium on October 4th are…


Luncheon Keynote with Mohamed El-Erian

Recorded Friday, October 4, 2019 — 2019 Investment Symposium Excerpts from Marquette’s…


A Prism of Capital Market Views: Portfolio Manager Panel

Recorded Friday, October 4, 2019 — 2019 Investment Symposium Marquette’s 2019 Investment Symposium opened with a portfolio…


Third Quarter Review of Asset Allocation: Risks and Opportunities

The third quarter saw mixed results for financial markets. Economic fundamentals generally remain strong but signs of deterioration are starting…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >