By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Wednesday that the downside risks to inflation were “at least as high” as the upside risks and that a further slide in the US dollar if the Federal Reserve’s independence were weakened, could be one such disinflationary risk.
In a hearing before the Senate Finance Committee, Villeroy, who heads the Banque de France, said the ECB had won the fight against inflation, pointing to euro area HICP at 2% and French inflation at 0.7%.
“[T]he downside risks to inflation are at least as high as the upside risks: the possible depreciation of the dollar if the Fed's independence is threatened is one of these downside risks,” he said. “We will therefore remain pragmatic and agile in each of the upcoming meetings of the ECB Governing Council.”
Economic growth kept showing significant resilience, he said, adding that GDP was expected to grow by at least 0.2% in 4Q 2025.
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