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Is QE In the Works at the European Central Bank?

Mike Kemp | Getty Images

Now that the Federal Reserve has launched Operation Twist, it's the European Central Bank's turn - and they may go further.

The euro has had more than its share of challenges lately, and now it has one more: talk that the European Central Bank could launch a round of quantitative easing.

"I think there's a very good chance that they will actually cut rates again, and I do think there's a reasonable chance they'll do QE," says Simon Derrick, chief currency strategist for Bank of New York Mellon. "The world's central banks are running the classic crisis playbook," he told CNBC's Simon Hobbs.

On rates, Derrick thinks the ECB will "go back to where they were six months ago, when everybody was saying don't make the move. I think we're going to go right back to a quarter or a half a point at most."

Sri Kumar, chief global strategist at TCW, goes Derrick one better. "They have to cut interest rates, they have to reverse the two increases they have made, and then they have to do a quantitative easing," he says. "I think the ECB will have to do a lot more than it has done." But monetary policy alone won't turn things around, he says, without more global cooperation.

Grim talk indeed. You can see more in the videotape.

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