Among the shifts, monthly bond purchases will be reduced to EUR60 billion from EUR80 billion starting in April. Also, the ECB will be able to buy government bonds that are yielding less than its deposit rate, which now stands at minus 0.4%.
Here are preliminary reactions from analysts about the ECB's policy changes:
"[ECB President] Mario Draghi spent most of the press conference trying to convince the audience that tapering doesn't actually exist, and even if it did, it wasn't on the ECB's table. Draghi and Co. at the ECB is reducing the size of its asset purchases to EUR 60 billion euros a month from April, even if it is extending the length of time it makes purchases through to December next year. Nice try Draghi, the ECB has tapered -- except tapering is now called calibration, and calibration isn't nearly as nasty as tapering, so the euro fell, stocks rallied and German bond yields backed off their earlier highs." -- Kathleen Brooks, research director at City Index
"By tapering its monthly asset purchases from EUR80 billion down to EUR60 billion, [Draghi] is still looking to inject an extra EUR540 billion in QE. To put this into perspective, this easily surpasses in equivalent terms the combined GDPs of Greece and Portugal, for example. Second, the nuance here is his growing support for fiscal support. A lesson from Japan is that QE provides cash to lend, but cannot force consumers and firms to borrow. The eurozone looks to be halfway down the Japan route. It too may be running QE and negative rates, but has yet to loosen the fiscal reins." -- Neil Williams, group chief economist at Hermes Investment Management
"The announcement of a reduction to QE quickly pushed the euro to 3-week highs but a closer inspection revealed the program's extension nonetheless resulted in a net increase: EUR540 billion versus EUR480 billion anticipated. A gentle unwind of the early rally was then exaggerated as Mario Draghi questioned the recent uplift in inflation and generally delivered a more cautious tone, including the commitment to re-visit the value of monthly purchases as conditions change. While guilty of showing a leaning towards Europe's more conservative members, a masterful Draghi wove the impression of a credible and adaptive strategy by the ECB." -- Richard de Meo, managing director of Foenix Partners
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