(Bloomberg) —



a group of people on a sidewalk: Pedestrians walk past stacked chairs outside a closed cafe in Plaza del Angel in Madrid, Spain, on Thursday, Oct. 8, 2020. France, Spain and the Czech Republic posted record increases in coronavirus cases, underscoring growing alarm in Europe as it struggles to control the pandemic.


© Bloomberg
Pedestrians walk past stacked chairs outside a closed cafe in Plaza del Angel in Madrid, Spain, on Thursday, Oct. 8, 2020. France, Spain and the Czech Republic posted record increases in coronavirus cases, underscoring growing alarm in Europe as it struggles to control the pandemic.

The European Central Bank isn’t happy with the inflation outlook and will decide “meeting by meeting” whether more monetary stimulus will be needed, chief economist Philip Lane said in an interview with the Wall Street Journal.

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Lane pointed to data arriving over the coming weeks that will help policy makers make their decision, dodging a question on whether updated forecasts in December might be a trigger.

“I wouldn’t focus on any one meeting,” Lane said. “It’s not the case that we only look at the formal projection rounds.”

Economists widely expect the ECB to expand its 1.35 trillion-euro ($1.6 trillion) emergency asset-purchase program by the end of the year. Policy makers have publicly disagreed over whether more support is needed, with Executive Board member Fabio Panetta arguing the risk of doing too much is smaller than being “too shy” and Bundesbank President Jens Weidmann warning against presuming the central bank would act.

The euro-area inflation rate has been negative since August, and the ECB currently predicts the measure to climb to 1.3% in 2022, far below its just-under-2% goal.

“The current inflation level remains far away from our goal,” Lane told the WSJ. “We don’t think that is a satisfactory inflation outlook.”

Governing Council members from Italy and Slovakia reiterated his view.

Ignazio Visco said in a separate interview with Il Corriere della Sera that monetary policy “must be expansive and remain so for a long time.”

“Through our monetary policy we are able to intervene effectively to defeat

Pacific Gas & Electric Co. transformers and power lines stand in Nevada City, California, June 12, 2019.



Photo:

David Paul Morris/Bloomberg News

Donald Trump promises to “keep America great” in a second term. But he won’t do it if his trade policies get in the way of a sorely needed upgrade of the U.S. electrical grid.

Investment in electricity for the 21st century will be a heavy lift for utilities. But it will become heavier if a Commerce Department investigation finds imports of transformers and related components to be a national-security threat and imposes tariffs. The price for the transformers required to modernize the grid is in the range of $8 billion—today. Deliberately raising that cost sounds insane. But then this is an election year.

In 2018 the Trump Administration used Section 232 of the Trade Expansion Act to declare imported steel a security threat and impose a 25% tariff. We warned the tariff wouldn’t make American steel producers more efficient but would hurt other industries. This is what happened in the transformer industry.

Transformers use a special electrical steel that in the U.S. is made by one company,

Cleveland-Cliffs

’ subsidiary AK Steel. Because U.S.-made “grain-oriented electrical steel” prices are high relative to the world market, many American transformer producers, prior to the 2018 steel tariffs, imported some of the raw material they need. The 25% steel tariff raised prices in the U.S. further, forcing many companies to move component manufacturing out of the country.

Without proof of unfair trade practices, national security is again the excuse of protectionists. Yet the steel in transformers comes from allies including Canada, South Korea, Japan and Brazil. Much of transformer and component production now comes from Canada or Mexico. Unless we’re expecting a sneak attack, the case for a national-security risk is