June 18, 2019  FRANKFURT, GERMANY

The European Central Bank could unleash more stimulus if the economy doesn't pick up soon, its president warned Tuesday, sparking a sharp drop in the euro and drawing an angry tweet from U.S. President Donald Trump.

Mario Draghi told a conference in Sintra, Portugal, that the ECB was not resigned in its quest to perk up the economy and said that “in the absence of improvement ... additional stimulus will be required.”

Europe's top central banker even held out the prospect of cutting interest rates, though they are already at record lows. 

“Further cuts in policy rates ... remain part of our tools,” he said. Draghi noted it was also possible to re-start a bond-buying stimulus program that had been halted only in December.

Investors read the comments as a clear step toward more stimulus in coming months, causing stock markets to rally and sending the euro lower against the dollar.

Draghi's statement was met with anger from Trump, who suggested it was an effort to boost European exports by weakening the currency. Trump wrote on Twitter that the lower euro was “making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.” 

 

 

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