ECB Governing Council member Francois Villeroy de Galhau said in an interview on Sunday, for this month’s meeting, “it’s desirable to bring rates to 2%, so a rise of 0.5 or 50 basis points.”
Bringing interest rate to 2% will market the first half of the game of normalization. “In the second half of the match, rates will continue to rise but I can’t say where this will stop,” adding the the pace would be slower.
He also noted it would be “wise to start to reduce (the balance sheet) in 2023, beginning with the APP holdings in the “first half of the year, clearly but cautiously and progressively.”
