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- ECB's Villeroy: ECB to cut rates in 2024
ECB's Villeroy: ECB to cut rates in 2024
- ECB's Villeroy sees rate cuts in 2024, barring any surprises.
- Inflation expectations need to settle at or below 2% before the ECB will act.
Banque de France (BoF) Governor and European Central Bank (ECB) policymaker François Villeroy de Galhau reaffirmed his rate cut expectations in 2024 while delivering his New Year's address to the European financial sector on Tuesday.
As head of the French central bank, Villeroy is part of the ECB's Governing Council, and has an active role in determining European central bank and monetary policy.
Key highlights:
- ECB to cut rates in 2024 as long as underlying fundamentals don't deliver any unforeseen surprises.
- ECB won't move on rates until inflation expectations are "solidly anchored" at 2%.
- ECB decisions to remain based on data, central policy planners refuse to be rushed, but won't be stubborn either.
- ECB must remain vigilant on inflation data.
Market reaction
With markets broadly anticipating rate cuts from the ECB this year, Villeroy's statements did little but confirm what markets already know. The Euro is little changed following Villeroy, with the EUR/USD paddling near 1.0935.
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