Though the ECB also outlined its plan to halt its quantitative easing policy by the end of 2018, many on Wall Street interpreted the central bank's rate forecast as more dovish than expected, pushing Treasury yields lower.
"The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary," the ECB said in its statement.
"The ECB did what the market generally expected which was to define a time and a direction for QE," said Thierry Wizman, global interest rates and currencies strategist at Macquarie Group. "But the euro has sold off despite this because the rates guidance that they provided was more dovish than what the market expected."
The ECB said that if incoming data follows expectations, then its monthly bond purchasing program would be extended through the end of the year, though at a lower pace. Until now, the central bank was scheduled to maintain its QE through September, carrying monthly purchases of €30 billion ($35 billion) of government and private debt.
Those purchases will now be cut to €15 billion during the last three months of 2018. The 10-year German bund yield fell sharply following the statement to 0.42 percent.
"Draghi said they didn't even discuss a date for the end of low rates," Wizman added. "This is about rates guidance, not QE."