ECB’s Villeroy: Would Make Sense to Get to 2% by Summer ‘Without Slowing the Pace’

15 January 2025

ECB’s Villeroy: Would Make Sense to Get to 2% by Summer ‘Without Slowing the Pace’
François Villeroy de Galhau, governor of the Banque de France, at the European Central Bank Forum on Central Banking in Sintra on Jule 2, 2024. Photo by the ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Wednesday said that the ECB had practically won the battle against inflation and called for a steady pace of rate cuts until reaching 2% in the summer.

In a hearing of the finance committee at the French Senate, Villeroy, who heads the Banque de France, repeated comments he made last week and said that ‘if the retreat of inflation is confirmed in the coming quarters as we forecast, it makes sense to go toward this 2% rate by next summer without slowing the pace’.

Reaching the neutral rate by then would provide support to the economy and mitigate the decline of households’ savings rate, according to Villeroy.

If the US were to head towards financial deregulation, ‘as some people are calling for’, it would be ‘dangerous, including for the financial system itself’, he said.

 

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