ECB Learns Fed Lesson on Reducing Monetary Dose

Last week, ECB chief Mario Draghi promised another nine months of quantitative easing, but cut his bond purchase program. While the move is a deft way to introduce the prospect of tapering without triggering a market meltdown, the economic backdrop suggests it's still too soon for tighter monetary conditions.

By reducing the dose while extending the prescription, the ECB was appeasing both the hawks and doves on its governing council. Draghi can still say he's doing whatever it takes to bolster the economy. And he can avoid rattling the markets as the Fed did when it first flirted with unwinding QE. But a look at the Federal Reserve's timing with its own tapering program suggests the ECB may be withdrawing its financial support too soon.