European Central Bank Cuts Rates, Buys Bonds

While most market participants had expected the European Central Bank (ECB) to start buying asset back securities, the decision to also lower rates was not expected.

The ECB took the following steps at Thursday's meeting:

• The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.05%
• The interest rate on the marginal lending facility will be decreased by 10 basis points to 0.30%
• The interest rate on the deposit facility will be decreased by 10 basis points to -0.20%

No announcement of quantitative easing, however. The S&P 500 sold off slightly following the news.