Pimco Sees a Liquidity Trap Gradually Unfolding in Europe

The video discusses the European Central Bank's (ECB) current position, suggesting it may be in a liquidity trap similar to Japan's past experience. It highlights the challenges faced by ECB President Christine Lagarde, as monetary policy seems ineffective in stimulating growth. The discussion suggests a shift towards fiscal policy, with monetary policy playing a supportive role, similar to Japan's approach. Asset purchases are identified as a potential tool for future economic support.

What potential changes at the European Council level could affect the coordination of fiscal policy?

What role do asset purchases play in the context of the current monetary policy?