5 takeaways from the ECBs tiny step toward a QE exit

Mario Draghi pulled off a verbal tightrope act Thursday as the European Central Bank unexpectedly took a step closer to ending its quantitative easing program but soothed any investor worriesfor nowover how quickly stimulus will be withdrawn.

The ECB, in its policy statement, unexpectedly dropped a longstanding pledge to boost the size of its 30 billion euro a month asset-buying program if the outlook for the eurozone deteriorated. While such a change in the ECBs guidance has long been contemplated, most economists had expected any tweaks to come at the April meeting at the earliest.

The euro
EURUSD, -0.7655%
initially rose after the policy announcement, but turned the move into a round trip as it gave up gains during Draghis news conference, which saw the ECB president emphasize that the decision was a backward-looking response to strengthening economic data and that it remained too early for policy makers to declare victory in the effort to return inflation to the central banks target of near but just below 2%.

See: European stocks leap as ECB nudges up growth view, euro slides

Here are some key takeaways:

Dovish normalization continues

A tepid inflation outlook despite growth that continues to erode the margin of spare capacity means a dovish normalization communications strategy will continue for the rest of 2018, as the ECB moves toward an eventual wind-down of its bond-buying program in the fourth quarter, said Lena Komileva, chief economist a

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