European Central Bank (ECB) President Mario Draghi confirmed expectations on Tuesday in expressing more dovish noises about the path ahead for interest rate normalization while observers cautioned about the implications for the euro zone economy and financial markets.
While acknowledging the trading bloc's "strengthening and broadening recovery," Draghi warned that the exit path from the bank's stimulus programs was still being blocked by a measly inflation showing.
"We are still in a situation of continuing slack, and where a long period of subpar inflation translates into a slower return of inflation to our objective. Inflation dynamics are not yet durable and self-sustaining. So our monetary policy needs to be persistent," Draghi told an audience at the European Central Bank Forum in Sintra, Portugal on Tuesday.
Yet, the bank's tiptoe approach towards withdrawing ongoing stimulus in the form of asset purchases and towards moving interest rates back into positive territory is increasingly rankling among economists and policymakers within the broader region.
"It would be very welcome from my side if they normalized sooner rather than later," Mar Gudmundsson, governor of the Central Bank of Iceland, told CNBC speaking from Sintra on Tuesday.