UBS Chief Weber Sees ECB Announcing Tapering Around September

UBS Group AG Chairman Axel Weber said he expects the European Central Bank to move toward tapering its quantitative easing program around September.

The comments by the former Bundesbank president come as ECB Governor Mario Draghi is under pressure to map out a path toward the end of the central bank’s massive stimulus. As the euro-area economy has picked up in recent months, ECB officials have been publicly debating when they might start to wind down their asset purchases and raise interest rates.

The ECB has to "scale back," Weber said Tuesday in a Bloomberg Television interview in Tokyo. "My expectation is that in June they will remove some of their easing biases that they still have in their language, and around September they will probably announce that they are going to taper their purchase program, which they will do over six to nine months in 2018," he said.

The ECB said last month intends to maintain its bond-buying at 60 billion euros ($66 billion) a month until at least the end of this year and will only raise rates well after it ends.

The central bank will soon be able to adopt a more optimistic tone on the euro-area economy -- a possible first step in winding down stimulus -- Executive Board member Yves Mersch said in a speech in Tokyo on Monday.

"Come mid next year, we’ll probably have the ECB with a stable balance sheet and we will talk about interest rate movements after that," Weber said. "The ECB is clearly on the path to normalization yet they are following the Fed with some delay. Like the Fed, they are data driven, so if anything were to go wrong in the economy they might change that course."

Bloomberg