ECB Blinks; Revives QE and Cuts Rates Deeper Below Zero

The ECB reduced the deposit rate to minus 0.5% from minus 0.4%, and said it'll buy debt from Nov. 1 at a pace of 20 billion euros ($22 billion) a month for as long as necessary to hit its inflation goal.

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The ECB changed its guidance on interest rates to say they'll stay at present or lower levels until the outlook for inflation "robustly" converges to its goal of just below 2%. It previously expected borrowing costs to stay unchanged until mid-2020. It also scrapped a 10-basis point rate premium previously attached to its long-term loan program.

The actions prompted U.S. President Donald Trump to tweet that the ECB is "acting quickly" while the Federal Reserve "sits, and sits, and sits." That's in line with his strategy of calling on the Fed to cut rates aggressively. The Fed is likely to lower borrowing costs next week for the second time this year, as central banks around the world ease to combat the spreading weakness.