U.S. Federal Reserve Chair Janet Yellen (R) speaks with European Central Bank President Marlo Draghi at the Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming August 22, 2014. REUTERS/David Stubbs
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The European Central Bank meeting, which takes place Thursday, is the prime event for markets seeking clarity on the bank's response to a stalled recovery, disappearing inflation and the sluggish pace of reform in the eurozone.Inflation in the 9.6 trillion euro economy dropped to a fresh five-year low of 0.3 percent in August and as the months fly by, the bloc's cushion against Japan-style deflation is getting smaller and smaller.So the ECB may have to reach deeper into its policy toolbox, and some analysts are even betting on an interest rate cut at the bank's meeting Thursday.Beyond the eurozone, the week is packed with monetary policy meetings: Sweden's Riksbank, the Bank of Canada, the Bank of Japan and the Bank of England will all be taking the stage.Although no policy action from the Bank of England is foreseen Thursday, it is still expected to be the first major central bank to raise interest rates, and it is expected to do so early next year, just ahead of a similar move by the U.S. Federal Reserve.
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