European Central Bank Governing Council policymaker and French central bank governor François Villeroy de Galhau, in an interview with an Italian newspaper, La Repubblica.
ECB will probably cut interest rates on October 17economic growth is
weak, bringing the risk that inflation will undershoot its
2% target”In the last two years our main risk was to overshoot our 2%
target, now we must
also pay attention to the opposite risk, of undershooting our
objective due to a weak growth and a restrictive monetary policy
for too long.”
Villeroy expects the Bank will cut further next year
ECB should be back at the “neutral” rate sometime in 2025
“If we are next year sustainably at 2% inflation, and with
still a sluggish growth outlook in Europe, there won’t be any
reason for our monetary policy to remain restrictive, and our
rates to be above the neutral rate of interest”
This article was written by Eamonn Sheridan at www.forexlive.com.
