>> The European Central Bank springing a surprise Thursday. President Mario Draghi cutting back its massive bond buying program, down to 60 billion euros a month, from 80 billion, though the program could run for longer than expected. That roiled markets, with traders asking if the bank was following the US Federal Reserve in an outright winding down of purchases.
Reuters Specialist Market Correspondent Mark Jones.>> So the market's kind of got a mixed signal there. And at first, we saw it couldn't really compute, so we saw a big sell off in the bond markets, the Euro surged. But then everything kind of reversed as Draghi came out and he cushioned the blow with some other tweaks as well.
And he was basically at pains to stress that this is not the kind of taper that the Fed did. They're gonna keep doing this for a long time, they're gonna be a lasting presence, he said. And that kind of basically pulled the markets back from the brink and everything steadied off.
>> The ECB's program of bond buying is intended to spur inflation. The banks had a couple of helping hands in that regard. Oil prices are on the up, and analysts bet that US President-elect Donald Trump plans a big spending spree. But price rises are still stubbornly below the 2% rate the bank would like.
>> They yet to see a kind of sustainable pick up in that core inflation. Things like wages, that really kind of feed inflation on the longer term, not just oil prices and things that tend to be temporary.>> The ECB has already 1.4 trillion Euros buying bonds. Now, it has a fine line to walk.
With European growth still subdued, many economists say this is no time to reduce stimulus. But hawks said the bank must end the monetary splurge. Thursday's mixed messages may be the closest Draghi can get to squaring the circle.