ECB’s Villeroy: Should Get Back to 2% Inflation Earlier Than Projected in September
22 November 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Friday said that the ECB was evidently succeeding in getting inflation under control and that authorities were quite sure of durably restoring price stability earlier than projected in September.
In remarks at the European Banking Congress, Villeroy, who heads the Banque de France, said that the US presidential election result ‘must obviously serve as another wake-up call’ and that the ‘probable direction’ of US policy was ‘more tariffs, more fiscal deficits, less regulation including in finance.’
‘And this could mean more risks for the global economy: more inflation – especially in the US –, more financial volatility, less trade and hence less growth including for Europe’, he said.
Getting inflation, which the ECB was ‘clearly in the process of reining in’, should continue to be the overriding goal, he said. The decline so far ‘clearly warranted’ the rate cut last month, he said
‘Despite possible ups and downs over coming months, we are very confident that we will sustainably reach our 2% target’, he said. ‘We should even get there earlier than expected in 2025 compared with our September forecasts.
That would mean a soft landing, he observed
According to Villeroy, the ECB was not currently behind the curve, and would decide further steps ‘in a pragmatic way, and following a data-driven and meeting-by-meeting approach’.
‘We are confident that victory against inflation is in sight, but we will pay close attention to the balance of risks and to its symmetry, including the possible risk of undershooting our inflation target, and of keeping economic activity unnecessarily subdued’, he said.