ECB’s Villeroy: Tariffs Unlikely to Be Inflationary, But Strong Euro Is Disinflationary

25 July 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Friday that tariffs were unlikely to cause inflationary pressures, while the strength of the euro was disinflationary.

In a written statement published on the website of the Banque de France, which he heads, Villeroy said that the Governing Council had concluded that risks to growth were still on the downside and that inflation was ‘very well under control.’

‘Tariff increases in the United States, the extent of which is still uncertain, are unlikely to cause it to rise, while the appreciation of the euro represents a significant disinflationary effect’, he said.

Villeroy said that it was therefore important to stay ‘completely open-minded’ about the ECB’s future rate path.

‘More than ever, in a volatile environment, agile pragmatism based on data and forecasts is essential’, he said.

Related articles:

• ECB’s Villeroy: Euro Strength Could Increase Risk of Undershooting
• ECB’s Villeroy: Underlying Inflation Outlook Unchanged Despite Middle East Conflict
• ECB’s Villeroy: Moves in Next Six Months ‘Could Be More in the Direction of Accommodation’