Newly appointed European Central Bank head Christine Lagarde makes her first official assessment Thursday of the mixed bag that is the eurozone economy, which suffers from slowing manufacturing and global trade even as consumer spending helps prop up growth.
Analysts think Lagarde will stress that the economy still needs support from the central bank, and that policymakers must be their guard against things turning out worse than expected. The ECB, however, is not expected to announce changes to a stimulus package decided Sept. 12 before Lagarde succeeded Mario Draghi on Nov. 1.
Doubts have grown about how much good additional central bank action can do to support developed economies; the U.S. Federal Reserve on Wednesday kept interest rates unchanged and signaled it would leave them alone through 2020.
Instead, interest is focused on Lagarde, who is presiding over her first meeting since she was appointed by European leaders as the head of the institution that sets monetary policy for the 19 euro countries that use the euro and their 342 million people. She is well known from her previous jobs as head of the International Monetary Fund and as French finance minister but investors will want to see how she communicates and explains the complexities of monetary policy to markets and voters.
Other themes that may come to the fore at her news conference are her plans for a review of the bank's monetary policy framework and how it defines price stability, the goal it is supposed to seek under the European Union treaty. There's also been discussion of whether the ECB should do more to support financing of projects aimed at fighting environmental pollution and climate change.
Analysts will also look for signals on how she will manage dissent on the ECB's 25-member governing council. A minority criticized the measures enacted under predecessor Draghi on Sept. 12. Those included a cut in the deposit rate to minus 0.5% from minus 0.4%. The rate is charged on excess cash left at the central bank overnight by commercial banks, so the negative rate is in effect a penalty that aims to push banks to lend the money to companies. The bank also started 20 billion euros ($22 billion) in monthly purchases of government and corporate bonds.