European Central Bank Governing Council policymaker and French central bank governor François Villeroy de Galhau, in an interview with an Italian newspaper, La Repubblica.
- ECB will probably cut interest rates on October 17
- economic growth is weak, bringing the risk that inflation will undershoot its 2% target
- "In the last two years our main risk was to overshoot our 2% target, now we must also pay attention to the opposite risk, of undershooting our objective due to a weak growth and a restrictive monetary policy for too long."
Villeroy expects the Bank will cut further next year
- ECB should be back at the "neutral" rate sometime in 2025
- "If we are next year sustainably at 2% inflation, and with still a sluggish growth outlook in Europe, there won’t be any reason for our monetary policy to remain restrictive, and our rates to be above the neutral rate of interest"
