French ECB Governing Council member François Villeroy de Galhau, speaking at a conference today, emphasized a cautious and pragmatic stance on monetary policy, downplaying the significance of recent stronger-than-expected wage data.
He described the Q3 surge in negotiated wages as a “backward-looking” indicator, primarily reflecting the “lagged effects” of earlier negotiations in Germany, which were already factored into the ECB’s September projections.
Villeroy highlighted a shift in risks, stating that the balance for both growth and inflation now tilts to the downside. He also noted that potential US tariffs are “not expected to alter significantly the inflation outlook in Europe”.
Against this backdrop, Villeroy reaffirmed the ECB’s commitment to “continue to reduce the degree of monetary policy restriction,” while underscoring that the pace must be guided by “agile pragmatism” and “full optionality” in future decisions.
