ECB Governing Council member Francois Villeroy de Galhau said yesterday, “it would be desirable to reach the right ‘terminal rate’ by next summer, but it is too early to say at what level.”
“We’ll then be ready to remain at this terminal rate as long as necessary,” Villeroy said. “The sprint of rate increases in 2022 becomes more of a long-distance race, and the duration will count at least as much as the level.”
“We need to be pragmatic and guided by observed data, including underlying inflation, without fetishism for increases that are too mechanical,” he added.
“Our forecast, and our commitment, is to bring inflation toward 2% between now and the end of 2024 to the end of 2025,” Villeroy said.
