The head of monetary policy of the European Central Bank (ECB), Francois Villeroy de Galhau, stated on Friday that the ECB needs to aim to be more predictable with its communication and added that could give near-term outlook on monetary policyas reported by Reuters.
Regarding the inflation outlook, Villeroy has indicated that the Eurozone inflation could halve by mid-2023, although it has acknowledged that it is currently “too fast and possibly persistent”.
Additional comments
“We will likely hit the terminal rate in the summer, which technically ends in September“.
“After the March meeting, we will probably go above 3%.”
“There will be no automatic moves at each meetingnor the impossibility of acting later if necessary”.
“The central criterion will be a change in the path of inflation, especially for core inflation“.
“The time that rates are maintained at the terminal rate is also key.”
“We will keep rates high for as long as necessary; We must be careful not to declare victory too quickly.”
“The calendar of rate cuts not an issue for this year“.
“The central issue for rate cuts is the return of an inflation outlook consistent with our 2% target.”
Source: Fx Street
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