Or rather, the beginning of the end may be in sight.
Yesterday the ECB president hinted that the bank’s mammoth bond-buying programme may be slowed from its current €60bn a month level in October. In response to questions after the latest no-change announcement on rates and QE, Draghi conceded that there had been “very, very preliminary” discussions about possible ways to limit the programme from October onwards.
He also said that there had been no discussion of expanding the types of assets the ECB could buy in what remains of the programme.
These comments were taken as a sign from markets that the direction of European monetary policy was now set on a more hawkish path, and the euro duly strengthened against both the pound and the dollar.
Draghi did seek to mitigate this a bit, warning that a stronger euro - which would make things tougher for the continent’s exporters and weigh on already weak inflation - could itself erect a barrier to the start of tapering.
He also made clear that the raising of rates would only begin “well past the horizon of the net asset purchases”, which means once QE has stopped.
As such, the normalising of monetary policy in Europe will be a long process. Draghi will be wary of triggering a rerun of the “taper tantrum” - the market wobble in 2013 that followed the US Federal Reserve’s announcement that it would begin to slow its version of QE.
However, to be talking about unwinding the European programme at all must be seen as a victory for the region, and for the ECB president in particular.
Rewind to 2012 when he made his “whatever it takes” speech, and the continent was in the midst of a full-blown crisis. Markets questioned the future of some of its most indebted members and pushed their government bond yields to dizzying highs. Some questioned the currency project itself.
Draghi’s speech laid out a potential kitchen-sink rescue package that could have seen the ECB buy the debt of Greece and others directly in exchange for structural reform. The plan was never enacted but was enough to sooth markets.
Since then growth has transitioned from weak to stable and, latterly, to impressive. Inflation remains below target but the serious threat of deflation appears to have receded.
The unwinding of extraordinary monetary policy is the next great challenge for global economies and markets. Europe appears to be in a position to start the process - something unthinkable when Draghi’s great promise was made.
Europe focused funds on our Select 50 list of preferred funds include:
FP Crux Euro Special Situations
Richard Pease and James Milne look for the best companies in Europe: those with strong competitive advantages, low capital intensity, competent management teams, and conservative valuations.
Fidelity Funds - European Growth Fund
Matt Siddle looks for ‘quality at an attractive price’. He argues that higher quality companies tend to outperform the wider market over the long run while exhibiting lower volatility.
Invesco Perpetual European Equity Income
Stephanie Butcher looks for well-run companies which pay attractive and sustainable dividends. She and her team members conduct over 400 meetings with company executives each year to understand prospective investments and generate new ideas.
Ed joined Fidelity in 2016 following a 13-year career in newspaper journalism, most recently as investment editor at The Daily Telegraph. He was previously news editor and personal finance editor for Thisismoney.co.uk, the money channel for Mail Online and has contributed articles to the Daily Mail.