Responding to Germany’s Constitutional Court ruling on the European Central Bank’s (ECB) QE case, St. Louis Federal Reserve (Fed) President James Bullard said on Tuesday, the fresh Euro area concerns could likely derail a global economic recovery, this time from the coronavirus pandemic, per Reuters.
Key quotes
“This will be the second time we have been in a major crisis where the ECB has been put under heavy pressure.”
“It is very tough going, lots of negotiation, lots of question marks about what policies would even be acceptable or allowable... It would help the United States and it would help Europe to have something more at the federal level that would have more authority, more power, more ability to borrow.”
His comments come as the ruling casted a doubt on the viability of the QE program in which the ECB has bought more than $2.17 trillion of government bonds over the last five years.
Market reaction
Amid mixed Asian stocks and negative S&P 500 futures, the risk sentiment remains tepid in Asia so far this Wednesday, with the US dollar index consolidating the latest recovery in a tight range around 99.80 region.
EUR/USD, meanwhile, trades flat at 1.0840 after Tuesday’s sharp decline.
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