As Mario Draghi Departs, the E.C.B. Is Divided Over His Policies

FRANKFURT — Mario Draghi led his last monetary policy meeting as president of the European Central Bank on Thursday, his legacy as savior of the eurozone clouded by divisions among the bank’s policymakers that have burst into the open in the final months of his tenure. Christine Lagarde will be sworn in as Mr. Draghi’s successor on Tuesday, and will immediately confront a revolt by members of the bank’s Governing Council who believe the bank’s easy money policies have created asset bubbles and set the stage for a financial crisis.…

Fed Chair Powell Speaks and Leaves Investors Expecting a Rate Cut

He said the Fed will ultimately “reach a decision” and “I expect we’ll have strong support for the decisions that we make, as we had in July.” Economic data are giving rise to the tension by sending mixed signals. There is plenty of bad news: A closely-watched index of manufacturing activity fell into contraction in August. Global growth is slowing. The University of Michigan’s consumer sentiment index posted a sharp decline, with one in three respondents spontaneously mentioning tariffs. The Fed’s regional banks report that many business contacts are holding…

Christine Lagarde Faces a New Challenge in Europe

Do Ms. Lagarde and Mr. Draghi think alike? Here’s a quick read on what they say: On weak inflation Mr. Draghi, June 18, 2019: In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required. Ms. Lagarde, April 2, 2019: Monetary policy should remain accommodative where inflation is below target, and should anchor expectations. Exchange rate flexibility should be used, as needed, to help absorb shocks. QUICK TAKE: Central banks should step in if inflation is weak. On government…