European Central Bank Expected to Cut Interest Rates in October, French Central Bank Chief Says - Market Update
In a recent interview with an Italian newspaper, French Central Bank Chief Francois Villeroy de Galhau stated that the European Central Bank is likely to cut interest rates on Oct 17 due to weak economic growth, raising concerns about inflation falling below the 2% target.
The ECB has already cut rates twice this year, and with inflationary pressures easing faster than anticipated, markets are now pricing in further policy easing with expected moves in both October and December.
Villeroy emphasized the importance of avoiding undershooting the inflation target, highlighting the need for a more accommodative monetary policy in light of sluggish growth in Europe. He predicted additional cuts in the deposit rate next year, aiming to reach a "neutral" rate by 2025.
While acknowledging temporary oil price surges due to geopolitical tensions, Villeroy emphasized the ECB's focus on underlying price stability in achieving its inflation goal. Looking ahead, he underscored the need for continued vigilance and flexibility in monetary policy.
In summary, the potential rate cuts by the ECB signal a proactive approach to support economic growth and maintain price stability. Investors and consumers should stay informed about these developments as they can impact interest rates, borrowing costs, and overall financial conditions. Stay tuned for updates on the ECB's monetary policy decisions and their implications for global markets.