European Central Bank Governing Council member Francois Villeroy de Galhau reiterated his view that the aggressive interest rate hiking cycle needed to tamp down high euro zone inflation is nearing an end.
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European Central Bank Governing Council member Francois Villeroy de Galhau reiterated his view that the aggressive interest rate hiking cycle needed to tamp down high euro zone inflation is nearing an end.
Recent rate increases will prove effective with a lag, the Bank of France governor told TV5Monde in an interview broadcast on Saturday.
“We’ve completed most of the journey and we need to look at the delayed transmission: the effect of past decisions is even more important then the effect of future hikes that will perhaps happen in the coming meetings,” he said.
The comments were consistent with those made by Villeroy in a speech in Washington on Wednesday, when he said the biggest impact of past rate increases is yet to come.
Villeroy declined to predict in Saturday’s interview what would happen at the ECB’s next rate-setting meeting in May. “We will see, meeting-by-meeting, in a pragmatic way, looking at data,” he said.
Inflation in France alone should end 2023 at about 4% after peaking at some point in the first half, Villeroy said.
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