FRANKFURT—The European Central Bank will trim emergency bond purchases over the coming quarter, it said on Thursday, taking a first small step towards unwinding the emergency aid that has propped up the euro zone economy during the coronavirus pandemic. After the ECB pulled out all the stops last year as COVID-19 ravaged the economy, high vaccination rates across Europe are bolstering recovery prospects and policymakers have been under pressure to acknowledge that the worst is over. The ECB did so by slowing the pace of its Pandemic Emergency Purchase Program (PEPP), which has kept borrowing costs low as governments took on unprecedented amounts of debt to finance the response to the pandemic. But with rising U.S. infection rates making the Federal Reserve hesitant to wind down its stimulus, the ECB was keen to stress it wasn’t about to close the money taps. “The lady isn’t tapering,” ECB President Christine Lagarde …
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