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 />Financial markets have been hypersensitive in recent weeks to anything that Mr. Draghi has said about plans to wind down central bank stimulus.<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 />By JACK EWINGJULY 20, 2017<br />FRANKFURT — The metaphor of the moment at the European Central Bank’s headquarters is "tightrope."<br />As in, what Mario Draghi, the bank’s president, will have to walk on Thursday.<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.<br />The European Central Bank is expected to wait until its next monetary policy meeting, in<br />September, to provide clear signals about how quickly it will reduce its purchases.<br />Any statements that change investor expectations about central bank plans can have a violent effect on bond prices and currency rates.<br />" he said, in part. that The central bank can accompany the recovery by adjusting the parameters of its policy instruments,
