The European Central Bank (ECB) may have taken another step away from its ultra-accommodative policy on Thursday, but the central bank will still move at a very slow pace before ending its stimulus program, a market strategist told CNBC Friday.
President Mario Draghi pleased the more hawkish members of the ECB at a meeting Thursday, announcing that the bank had dropped the so-called easing bias — the intention to increase the level of its bond buying in size and duration if the economic backdrop changes. This program was brought in following the euro zone debt crisis of 2011 to boost lending and stoke inflation.
Investors interpreted the move Thursday as a sign that the bank is more positive about the euro zone economy and is slowly preparing to end years of monetary stimulus.
However, Derek Halpenny, European head of global markets research at Japanese financial group MUFG, said that the stimulus will not end overnight. "(The ECB) looks excessively on the loose side and they do seem to go at an ultra-slow pace of removing policy," he said.