Latest news with #Villeroy
RTÉ News
16-05-2025
- Business
- RTÉ News
ECB may be nearing end of rate cuts but trade war is a risk, policymaker says
European Central Bank interest rates may be close to bottoming out but uncertainty was high and the environment was prone to sudden changes that could also alter the policy outlook, ECB policymaker Martins Kazaks said today. The ECB has been cutting interest rates quickly over the past year and the debate over where to end the easing cycle is starting to gain prominence as the ECB's "baseline" forecast sees inflation settling around the 2% level. "We are, by and large, within the baseline scenario," Kazaks told CNBC. "And if the baseline scenario holds, then I think we are relatively close to the terminal rate already," he said. "A couple of more cuts may be (possible), but the important thing is to see where the trade talk and the trade story take us, and then of course we'll act," he added. ECB board member Isabel Schnabel has already argued for steady rates while French policymaker Francois Villeroy de Galhau said he saw room for more easing. Markets now see a roughly 90% chance of an ECB rate cut on June 5 but then price only one more easing over the rest of year, suggesting that the ECB's deposit rate could bottom out at 1.75%. An escalation in the global trade war is a key risk but Mr Villeroy said the ECB would not use interest rates to influence the value of the euro, turning a trade war into a currency war. "Unfortunately, there is a risk of trade war, but a currency war would be a situation where each country is actively using its interest rates to try and gain an economic advantage. We are not at that point right now," Mr Villeroy, who also heads the Bank of France, told regional French newspapers in an interview published today.
Business Recorder
16-05-2025
- Business
- Business Recorder
ECB's Villeroy: Volatility reflects trade wars, not currency wars
PARIS: European Central Bank policymaker Francois Villeroy de Galhau said economic and market volatility reflected trade wars rather than currency wars. 'Unfortunately, there is a risk of trade war, but a currency war would be a situation where each country is actively using its interest rates to try and gain an economic advantage. We are not at that point right now,' Villeroy, who also heads the Bank of France, told regional French newspapers in an interview published on Friday. ECB to stand by past stimulus policies in strategy review 'The current currency moves are more of a reflection on revisions to economic forecasts,' added Villeroy, who is also head of the Bank of France.
Reuters
13-05-2025
- Business
- Reuters
ECB's Villeroy sees room for additional rate cut by summer
PARIS, May 13 (Reuters) - There is room for another rate cut by the European Central Bank by the summer, ECB policymaker Francois Villeroy de Galhau said in a French newspaper group interview on Tuesday. Villeroy - who is also head of the Bank of France - said the United States would likely see an uptick in inflation from President Donald Trump's tariffs, but Europe should be spared. "We also don't see inflation picking up. The Trump administration's protectionism will lead to a restart of inflation in the United States, but not in Europe, which will likely allow for another rate cut by the summer," he told the EBRA newspaper group. The next ECB monetary policy meeting is due to conclude on June 5.
Yahoo
28-04-2025
- Business
- Yahoo
ECB's Villeroy: there is still gradual margin for rate cuts
PARIS (Reuters) -U.S. President Donald Trump's tariff threats are creating uncertainty for economies around the world but there is still margin for further interest rate cuts in Europe as inflation in the euro-zone heads lower, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Monday. "We are in a moment of great uncertainty ... Mr Trump's polices are not working. The policies of this Trump administration are playing against the U.S. economy and unfortunately also against the world economy," Villeroy - who is also head of the Bank of France - told RTL Radio. Noting that some economists were even expecting a recession in the United States, Villeroy added: "Protectionism does not work, it means less growth and more inflation." Villeroy reaffirmed that he saw no recession risk in France or in Europe, as inflation continued to decline. "We still have a gradual margin for rate cuts," he said. ECB policymakers are becoming increasingly confident about cutting interest rates in June as inflation continues its march lower, but there is little to no appetite for a big move, six sources told Reuters last week. The ECB trimmed its benchmark rate to 2.25% earlier this month.
Yahoo
23-04-2025
- Business
- Yahoo
U.S. could dip into recession on trade war, French central banker says
(Reuters) -The United States could dip into recession on the fallout from a global trade war but everyone will suffer, including the euro zone, even if to a lesser effect, French central bank chief Francois Villeroy de Galhau said on Wednesday. The U.S. has imposed a raft of tariffs on most nations around the world and while it has suspended some duties, many remain in place and the threat of trade turmoil also weighs on confidence, investment and output. "The new measures announced as well as the increasing unpredictability, constitute a major negative shock to the global economy, but first and foremost to the U.S. economy," Villeroy told the Atlantic Council in Washington. "There could even be a U.S. recession, which was unthinkable three months ago." The impact on the euro zone could be much smaller but the strife could still knock off at least a quarter of a percentage point from 2025 GDP, Villeroy, who is an influential ECB policymaker, said in a speech. While some economists say a trade war is likely to push up inflation, Villeroy played down these worries, saying the net impact could even lower prices. "There is currently no inflationary risk in Europe," he said. "The impact (of a trade war) on inflation remains more uncertain but could be as a whole on the downside." Villeroy said further attacks on the independence and credibility of central banks could add to the disruption experienced in financial markets in recent weeks. U.S. President Donald Trump, who has repeatedly attacked Federal Reserve Chair Jerome Powell in recent weeks, backed off from threats to fire him this week, fuelling a rally in financial markets that had been nervous over a potential loss of the Fed's independence. "Let me ... express again my gratitude to Fed's Chair Powell, who admirably shows how a central banker must behave," Villeroy said.
