Europe's stimulus likely to keep running as economies reopen

The European Central Bank is likely to say it's too early to withdraw its stimulus at its meeting on Thursday

FRANKFURT, Germany -- The European Central Bank is expected to leave its stimulus efforts running at full steam Thursday — even as the economy shows signs of recovery as pandemic restrictions ease. And that could present a challenge for ECB head Christine Lagarde. She faces a balancing act: acknowledging improving economic data without triggering a premature market reaction that anticipates the eventual reduction in central bank support for the economy. Any talk of a stimulus taper could mean higher borrowing costs for companies — the last thing the ECB wants right now. “Even if economic developments would in our view clearly justify at least having a first tapering discussion, the sheer mention of such a discussion could push up bond yields further and consequently undermine the economic recovery before it has actually started," said Carsten Brzeski, global head of macro at ING bank.