Speaking at a conference in Tokyo on Thursday, European Central Bank (ECB) policymaker François Villeroy de Galhau highlighted a shift in risks to the downside for both growth and inflation in the Eurozone. Villeroy expressed optimism about the central bank‘s fight against inflation, signaling progress toward achieving the ECB’s price stability goals.
Key Comments from Villeroy
Inflation Outlook: Villeroy stated that inflation in Europe could stabilize at the ECB’s 2% target by early 2025, marking significant progress in curbing price pressures.
Policy Flexibility: While emphasizing the need to continue reducing the restrictiveness of monetary policy, he called for an “agile pragmatism” in determining the pace of easing.
Trade Impacts: The policymaker downplayed the potential impact of new Trump-era tariffs on Europe’s inflation trajectory, suggesting they would have minimal influence.
Future Strategy: Villeroy stressed the importance of maintaining “full optionality” in upcoming policy meetings to respond effectively to evolving economic conditions.
Implications
Villeroy’s remarks reflect the ECB’s cautious optimism about reaching its inflation targets while signaling a gradual shift away from restrictive policies. The central bank’s commitment to adaptability underscores its readiness to balance growth and inflation risks amid global economic uncertainties.
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