ECB’s Villeroy: Trump’s Plans Risk Raising US Inflation, Lowering Global Growth

13 November 2024

ECB’s Villeroy: Trump’s Plans Risk Raising US Inflation, Lowering Global Growth
François Villeroy de Galhau, governor of the Banque de France, at the ECB’s Governing Council meeting in Ljubljana on October 17, 2024. Photo by Andrej Hanžekovič/ECB.

By Marta Vilar – MADRID (Econostream) - European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that US President-elect Donald Trump’s economic programme could bring inflation back to the US.

In an interview with French radio France Inter, Villeroy, who heads the Banque de France, said that Trump’s plans risked ‘lowering growth a little bit, all over the world.’

For Villeroy, it remained to be seen if this weakness in economic activity would be more acute in the US, China or Europe.

‘The programme risks bringing back inflation to the United States,’ he also said. A typical consequence of protectionist measures is that consumers end up able to buy less for the same amount of money, he argued.

Asked if the European economy could weaken further after Trump’s win, Villeroy said that ‘Europe must wake up’, that this was so before the 2024 election and was ‘even more true today’.

As to future moves on the ECB’s monetary policy path, Villeroy did not hint at what could happen in December.

‘Our next Board of Governors meeting is on December 12: we'll see then, and we have a lot of meetings in 2025. I note that at 3.25%, interest rates in Europe are much lower than in the United States or England, where they are at 4.75%, while we have more or less the same level of inflation. This is a fair monetary policy’, he said.