The European Central Bank (ECB) unveiled a package of measures to tackle too-low inflation, from a cut in the floor for interest rates to an expansion of its bond-buying program by at least 360 billion euros (US$390 billion). Investors were unimpressed.
The Frankfurt-based ECB will extend quantitative easing (QE) by six months, until at least March 2017, at the current rate of 60 billion euros a month, and will broaden the assets purchased to include local and regional debt, ECB President Mario Draghi said on Thursday. The Governing Council earlier reduced its deposit rate by 10 basis points, to minus 0.3 percent.
The fresh stimulus coincides with a shift in global monetary policy, with the ECB adding stimulus as the U.S. Federal Reserve prepares to start its process of normalization. Even so, financial markets reacted with skepticism, sending the euro up as much as 2.6 percent and equities and government bonds down in a sign that Draghi's measures fell short of expectations.
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