A modest retreat. The European Central Bank announced a new package of cheap loans and a delay of an expected rate hike in a bid to prevent a slowdown from turning into a downturn. With Italy already in recession and Germany teetering on the precipice, the central bank loans, known as targeted longer-term refinancing operations, are intended to encourage commercial banks to keep lending. Additionally, the new round of two-year loans will cushion the impact of the previous round’s coming due starting in June 2020. The ECB has not, however, reversed course on its 2.6 trillion-euro ($2.9 trillion) bond-purchasing program, which ended in December. The ECB also cut its 2019 growth projections for the eurozone to 1.1 percent from 1.7 percent. On Wednesday, the Organization for Economic Cooperation and Development cut its 2019 growth forecast for the eurozone to 1 percent from 1.8 percent; for Germany to 0.7 percent from 1.4 percent; and for Italy to -0.2 percent from 0.8 percent.
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