European Central Bank ready for further stimulus

The European Central Bank will intervene in government bond markets if needed, Austrian central bank chief Robert Holzmann said today.
The announcement comes as the governing council members promised that the bank will support countries whose economies are heavily damaged by the coronavirus outbreak.
“If there is a need to intervene in the area of government bonds, measures will be taken”, Holzmann said.
After US president Donald Trump banned travel from most of Europe, on Thursday ECB chief Christine Lagarde upset investors by saying it was not the bank’s job to help virus-stricken countries such as Italy on the debt market.
On Thursday, the bank voted to hold its target interest rate unchanged. It said it would offer loans to banks at interest rates as low as 0.75% and buy more eurozone debt in an effort to mitigate the economic shock of the pandemic.
Italian board member Fabio Panetta said in an interview that the ECB was ready to rein in “unjustified” spreads between member countries’ euro zone bond yields and even beef up its debt purchases.
The financial markets have been hard hit by the uncertainty amid the virus pandemic. Global supply chains have been disrupted. Investment and consumer demand have plunged, with a rising risk of a global recession.