The ECB has to strike a delicate balance between preparing markets for an exit from QE and keeping its options open to extend its QE program further, if need be. The most difficult challenge for the ECB is that it is still not sufficiently fulfilling its price stability mandate despite a stronger than expected euro area recovery. The stronger Euro, which is pushing down inflation, does not make life any easier for the central bank.
After today’s press conference, an exit from the bond purchase program in October this year has not become any likelier. And even if it should end up being the case, one still should not make the mistake of expecting a timely rise in policy rates. I expect the first rise in policy interest rates to materialize at the end of 2019.