Mohamed A. El-Erian , Columnist

Why the ECB Decided to Stand Pat on Stimulus

A mere hint of paring back in recent remarks by Mario Draghi ignited a mini taper tantrum.

July 20, 2017 at 3:58 PM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

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Photographer: Peti Kollanyi/Bloomberg

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The European Central Bank had many reasons to scale down its exceptional monetary stimulus when its governing council met on Thursday. Instead, the central bank held off on doing anything until after the summer. Understanding why sheds light on the dominant influences on policy at this stage of Europe’s economic recovery.

Europe's economy is experiencing a pickup in both current and forward indicators of growth. Improvements in household and corporate sentiment and activity have been reinforced by a decline in perceptions of political risk following the victory of Emmanuel Macron in the presidential and legislative elections in France.