ECB Governing Council member Francois Villeroy de Galhau told French radio that inflation is “not only too high but also too broad”. The ECB will purse a “gradual but sustained” rate hikes until reaching neutral range. He estimated that it’s “somewhere between 1% and 2%”.
Separately, another Governing Council member Robert Holzmann said, “financial markets reacted very well to yesterday’s announcement.” “Even if we had started with a 50 bps rate hike it might have an effect on credibility but it would have raised expectations of bigger rate rises afterwards,” he added.
