NEW YORK (TheStreet) -- Treasury Secretary Jack Lew breathed a sigh of relief last week when the European Central Bank issued unprecedented policy to combat growing deflation concerns in the European region.
Lew, answering questions at the Economic Club of New York from Macy's (M) CEO Terry Lundgren and Stern School of Business Dean Peter Blair Henry, said the features of the ECB's changes highlighted some of the Obama administration's concerns about the European recovery.
The Treasury Secretary said he was pleased with the ECB's recent decision to encourage banks to lend to small- and medium-sized private enterprises, a sector he says has lagged the United States since the end of the Great Recession.
The ECB on June 5 announced its intention to cut its key refinancing rate to 0.15% from 0.25% and set negative deposit rates, which would require private banks to pay the central bank to hold reserves. They also started a lending program targeted at banks that would lend to the private sector, and began preparing for future asset-backed security purchases, which would be similar to the Federal Reserve's actions since the 2008 financial crisis.
"What Europe is doing, economically, has a big effect on U.S. stocks," Wells Fargo Advisors chief equity strategist Scott Wren, said in an interview. "So the better the European economy is doing, the more money our companies are going to make."