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European Central Bank (ECB) Lowers Rates, Sets November Restart for QE

ECB to Restart Open-Ended Bond-Buying Program at €20 Billion Monthly

European Central Bank (ECB), the central bank for the euro that administers monetary policy for the Eurozone, on May 17, 2015 in Frankfurt, Germany.

The European Central Bank (ECB) announced Thursday morning that they are lowering their deposit rate from -0.4% to -0.5%. Additionally, they will be restarting their quantitative easing (QE) bond-buying program in November at a scale of €20 billion per month.

They also gave aggressive forward guidance that their QE bond-buying will be “Open Ended,” meaning it will continue until inflation in the Eurozone hits or gets very close to +2%.

“The governing council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates,” the ECB said in a statement.

The statement on the action has already sent the Euro convincingly below the 1.10 Euro/$US benchmark, even before the Q&A press conference this morning. However, it is still above the lows for the year in 2019.

While the trade is a very fluid market, 15 minutes in advance of the Draghi presser, the Euro is trading at 1.0968 to the US$$. The low for the year in 2019 is Euro 1.0926 to the US$$, certainly a level everyone will be watching closely should their be a sharper sell off.

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Timothy Anderson

Tim is a native of Grand Rapids, Michigan, who nows works in the New York City area. His areas of expertise include business, economics and politics.

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Timothy Anderson

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