ECB’s Villeroy: ‘Pragmatic Gradualism’ Essential for Future Rate Cuts

11 June 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Decisions about future rate cuts should be made in line with ‘pragmatic gradualism’, European Central Bank Governing Council member François Villeroy de Galhau said Tuesday.

Speaking at the Paris Finance Forum, Villeroy, who heads Banque de France, said, ‘As regards our next rate cuts, I plead for a "pragmatic gradualism", both on the timing, without haste nor procrastination, and on our terminal rate.’

According to Villeroy, the ECB would continue to be ‘outlook driven’ and closely monitor inflation forecasts.

The neutral interest rate level should not be the endpoint of rate-cutting phase in the euro area, he said.

‘We remain confident that barring an external shock, we will bring inflation back to our 2% target by next year, and that we will reach it with a soft rather than a hard landing’, he said.