That’s despite pleas from outgoing European Central Bank President Mario Draghi that fiscal policy makers should step up after the central bank resumed quantitative easing last month.

Europe’s largest economy is prepared to spend “a lot of money” if it faces an economic crisis, but those conditions don’t exist, Finance Minister Olaf Scholz said Oct. 10.

Under the country’s constitution, the lower house of parliament must first declare a crisis if the government is to issue debt beyond the normal guidelines.

The likely result for now is a “slow-motion stimulus,” Berenberg economist Florian Hense told Bloomberg Television on Oct. 10.

Federal Reserve
The Fed, for its part, was fairly quick off the mark to cut rates, by a quarter-percentage point each in July and September, even as the economy powered ahead.

But it’s unclear how much further it’ll go even though growth now is slowing. Some policy makers have expressed concern that lowering interest rates may encourage risk taking and fuel financial-market bubbles.

Powell has likened today’s situation to two instances in the 1990’s when the Fed cut rates three times, just enough to ensure that the economy “gathered steam and the expansion continued.”

But sticking a soft landing and avoiding a crash is not easy.

Indeed, research by New York Fed President John Williams suggests the central bank should be aggressive in easing policy when rates are low.

Deutsche Bank Securities economist Matthew Luzzetti said trade policy uncertainty may be tempering the Fed’s response as it tries to sort through sudden shifts in President Donald Trump’s stance and their impact on financial markets.