ECB/Villeroy: Potential U.S. Tariffs Will Not Significantly Alter Inflation Outlook

Forex - François Villeroy de Galhau, the President of the French Central Bank and a member of the ECB Governing Council, stated that the high tariffs imposed on imports from the United States are unlikely to have a significant impact on inflation in the Eurozone, and that the European Central Bank should continue to lower borrowing costs.

Villeroy mentioned that the impact of potential tariffs from the U.S. on Eurozone inflation rates is expected to be modest, while economic growth expectations may weaken. He said, “The risk balance regarding growth and inflation is indeed shifting downward, and the potential U.S. tariffs are not expected to substantially change the inflation outlook in Europe.”

He emphasized that the central bank should continue to lower its key interest rates, but this should be done at a pace determined by "agile pragmatism." Villeroy commented, “The victory against inflation in Europe appears to be in sight. Looking ahead, in my view, the path is clear - we must continue to reduce the degree of monetary policy tightening.”