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ECB’s Villeroy: All Else Equal, We Should Take Rise in Bond Yields into Account in Our Assessment

27 March 2025

ECB’s Villeroy: All Else Equal, We Should Take Rise in Bond Yields into Account in Our Assessment
François Villeroy de Galhau, governor of the Banque de France, at the European Central Bank Forum on Central Banking in Sintra, Portugal on June 27, 2023. Photo by Sergio García/ ECB under CC BY-NC-ND 2.0.

By Marta Vilar – BRUSSELS (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Thursday that the ECB should take into consideration the rise in European bond yields if nothing else changes among the variables the ECB monitors.

In a panel discussion at the IIF European Summit 2025, Villeroy, who heads the Banque de France, said that there had been a ‘significant steepening of the curve’ with the rise in long-term rates, while short term rates had eased.

‘Short-term effects are more significant than a long-term increase’, he said.

Villeroy also noted that the equivalent in the US, the 10-year Treasury yield, was much higher than the German bund.

‘The increase of long-term yields, all other things being equal, means a tightening of financial conditions which we have to incorporate in our assessment’, he said.

The ECB should however also take into account all the other variables it monitors, he added.

 

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