European Central Bank Member and French Central Bank President Francois Villeroy de Galhau said that interest rate hikes should continue until inflation falls.
ECB official Francois Villeroy de Galhau said it was necessary to continue the rate hike. In an interview with the Irish Times, Galhau stated that inflation has not peaked and said, “This is why interest rate hikes should continue.”
Eurozone data released last week showed that headline and core inflation continued to rise to a record high in October. Expressing that headline inflation may reach its peak in the first half of 2023, Villeroy stated that there may be a few more interest rate hikes next year, but that the increases may be lower.
“It is too early to tell where the peak will be in interest rates. However, we are not far from the neutral interest rate. So from now on, our rate of increase in interest rates may be more flexible and slower,” Villeroy said. he said.
Pointing out that there may be interest rate hikes without triggering a significant increase in unemployment, Villeroy said, “Energy will be more effective than monetary policy in next year’s growth. Our goal is not to cause a recession, but to fight inflation.”
