Goldman Sachs Sees European Economic Cycle `Near the Trough'

The video discusses the current state of the European growth cycle, highlighting emerging risks and weak data. It suggests that the ECB is likely to hold its current position due to slight improvements in growth outlook and inflation. However, if conditions worsen, the ECB has tools such as rate cuts and asset purchases to respond. The effectiveness and potential side effects of these tools are also considered.

What is the current stance of the ECB regarding its monetary policy?

• The ECB plans to cut rates immediately.

• The ECB will increase rates soon.

• The ECB has no clear policy direction.

• The ECB is likely to remain on hold.

Which of the following risks have recently receded, according to the transcript?

• Brexit and trade wars

• GDP growth and industrial production

• Inflation and unemployment

• Interest rates and inflation

What is the ECB's baseline approach if economic conditions do not worsen?

• To raise interest rates

• To remain on hold

• To increase asset purchases

• To cut rates aggressively

What is considered the first line of defense for the ECB if conditions worsen?

• Increasing the purchase pace

• Cutting rates further into negative

• Raising interest rates

• Reducing asset purchases

What is the ECB's effective lower bound for interest rates?

• 0%

• -0.5%

• -1%

• -1.5%