However, optimism for an ECB rate cut was tempered by signs that the ECB isn't prepared to take more aggressive steps to combat the impact of the euro-zone debt crisis, such as ramp up open-market purchases of European government bonds.
There was no good reason that open market purchases should be considered routine and non-threatening if the target Fed-funds rate is above a certain level and the end of the world below that level.
When the Federal Reserve Open Market Committee met in June, more bond purchases to push down long-term Treasury and mortgage rates were already on the table.
But unlike the Fed, which has the authority to anchor short-term interest rates and conduct open-ended Treasury purchases, the SPR grants the President no such sway in the oil market.
If short-term interest rates (primarily the target Fed-Funds rate) are close to zero the impact of more bank credit and more money creation through open market purchases remains.