ECB’s Villeroy: This ‘Favourable’ Interest Rate Zone Does Not Mean Being ‘Static’

10 June 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Tuesday that being at 2% inflation and 2% interest rates did not mean being ‘comfortable’ or ‘static’.

In a speech at the 2025 Paris Financed Forum, Villeroy, who heads the Banque de France, said that the ECB had ‘successfully normalised its monetary policy over the past year with eight successive cuts to short-term rates.’

He remembered his ‘wish’ of being at 2% by the summer, pronounced back in January, according to Villeroy.

After the rate decision last week, ECB interest-rates were now at the ‘favourable "2 and 2" zone, with inflation forecast at 2% this year – which is our target – and our key rate at 2%’, he said.

‘But in such an uncertain environment, this favourable zone does not mean a comfortable zone or a static zone: we will remain pragmatic and data-driven, and as agile as necessary’, he added.

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