ECB’s Rate Hike Pause Supported by Governing Council Member

Francois Villeroy de Galhau, a member of the European Central Bank’s (ECB) Governing Council, has voiced his support for the recent decision to pause interest rate hikes, highlighting the importance of patience during the current economic adjustment period. This endorsement aligns with the ECB’s objective to maintain existing borrowing costs as long as they remain effective, emphasizing the institution’s commitment to achieving a 2% inflation target by 2025.

The pause in rate increases follows a series of 10 consecutive hikes initiated by ECB President Christine Lagarde, who has expressed expectations for further price easing and has noted the significant effects of elevated borrowing costs on financing conditions and demand.

Villeroy believes that the current economic landscape adequately supports this decision to halt rate hikes. He advocates for a future monetary policy that emphasizes confidence and patience, further solidifying the ECB’s strategic focus on ensuring economic stability within the region.