ECB’s Villeroy: Changes Since April 2 Argue for Rate Cut in Near Future

9 April 2025

ECB’s Villeroy: Changes Since April 2 Argue for Rate Cut in Near Future
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 – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that the ECB should cut rates soon given the developments that had taken place after the US tariff announcement.

In an interview with French newspaper Le Monde, Villeroy, who heads the Banque de France, said that ‘[t]here is still room for rate cuts, which we must decide according to an agile pragmatism: pragmatic because it is based on economic data, and agile because we have to move as fast as is justified.’

The extent to which the situation has changed since April 2 argued for another rate cut ‘in the near future’, he said.

The European economy could suffer a loss of 0.25% of GDP due to the trade tensions, he said.

‘The shock is not negligible, but it would not be a recession’, he said. ‘In the current volatility, however, we should be careful not to revise too hastily: we will publish our new economic projection in June.’

The ECB was closely monitoring developments on financial markets, he said.

 

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