Mario Draghi of European Central Bank Faces a Monetary-Policy Tightrope<br />The bank’s Governing Council is unlikely to change policy after its meeting on Thursday,<br />but Mr. Draghi will have a difficult job when he faces the media at a news conference after the meeting: to gently prepare markets for the day the central bank will begin withdrawing stimulus, without provoking an overreaction.<br />press conference on Thursday will serve to show what a tightrope act the central bank now faces,”<br />Jörg Krämer, chief economist at Commerzbank, said in a note to investors this week.<br />For example, Mr. Krämer and others expect the central bank to omit a line from previous<br />statements about standing ready to increase bond purchases should conditions warrant.<br />Financial markets have been hypersensitive in recent weeks to anything that Mr. Draghi has said about plans to wind down central bank stimulus.<br />Yet the day will soon come when the European Central Bank begins tapering its purchases of government<br />and corporate bonds, the so-called quantitative easing it has been using to drive down market interest rates.
