The European Central Bank (ECB) under President Mario Draghi has announced a massive new stimulus program in order to assist the ailing Eurozone economy. Besides cutting the deposit facility rate by 10 basis points to -0.50%, a fresh round of quantitative easing (QE) was announced. Starting November 1st 2019, the ECB will restart its bond buying program at a pace of €20 billion per month. The QE program is open-ended and will remain in place until inflation reaches the ECB target which currently stands at 2.0%. The Euro initially sold off, but recovered and advanced after the press conference.

Draghi, who has only one more ECB meeting until his term ends, announced that “We have headroom to keep going on for some time at this rhythm. We still think the probability of recession for the Euro area is small, but it’s gone up.” He has been at the helm of the ECB for eight years and will be replaced by Christine Lagarde, the current managing director of the International Monetary Fund (IMF). The ECB also decreased the costs of its long-term loans by ten basis points which boosted the Italian banking sector. Bonds surged which sent yields tumbling.