Mark Gilbert , Columnist

The Bond Market Doesn't Believe Draghi

Shifting yields suggest the end of QE is coming.

December 9, 2016 at 6:15 AM UTC

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. A former London bureau chief for Bloomberg News, he is author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

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The beatings will continue until morale improves, the saying goes. That's one interpretation of the European Central Bank's somewhat convoluted rejig of its quantitative easing program this week.

By insisting he's not tapering bond buying while simultaneously reducing the monthly purchases and extending the time frame, President Mario Draghi is sending a mixed message that likely reflects disagreements among his Governing Council members. Cutting the program to 60 billion euros ($64 billion) per month from 80 billion euros throws a bone to those who worry that it's time to withdraw the monetary medicine; lengthening the timeline until the end of next year pacifies policy makers who fear the patient isn't yet on the road to recovery.