We would need to see a marked and sustainable improvement in economic activity, the labor market, core inflation and inflation expectations before the ECB would consider stopping QE. That said, the ECB might be tempted to change its policy mix if the supply of eligible assets becomes too scarce.
For instance, it could start tapering earlier than September 2016, in exchange for more liquidity (LTRO). By doing that, the ECB could keep its accommodative monetary policy stance, keep signalling low interest rates and even achieve the same increase in its balance sheet size.
But Societe Generale says "In view of our still-low inflation forecasts for 2017-18, we expect asset purchases and cheap liquidity provisions to continue beyond September 2016, until mid-2017, albeit at a reduced pace. A first ECB rate hike will not occur until mid-2018".
