MarketWatch First Take: The ECB just took a ‘baby step’ toward reducing stimulus

Mario Draghi and the European Central Bank didn’t disappoint Thursday, making the smallest possible move—but a move nonetheless—toward eventually tapering the bank’s extraordinary stimulus program.

The ECB Governing Council delivered an important tweak to its forward guidance on rates. It dropped language included in previous statements that had indicated the bank was ready to cut already ultralow interest rates—the refi rate stands at 0% and the deposit rate at minus 0.4%—even further if needed.

What’s changed in the @ECB‘s language pic.twitter.com/zRcqxdty9v

— Tasos Vossos (@tasosvos) June 8, 2017

So, modestly hawkish, right? Not in the eyes of the market. The euro EURUSD, -0.3465%slumped during ECB President Draghi’s news conference, putting more emphasis on a deteriorating inflation outlook.

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