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    Home > Finance > ECB could reach neutral rate by summer, Villeroy says
    Finance

    ECB could reach neutral rate by summer, Villeroy says

    Published by Global Banking & Finance Review®

    Posted on January 24, 2025

    1 min read

    Last updated: January 27, 2026

    Francois Villeroy, ECB policymaker, addresses the potential for reaching a neutral interest rate by summer amid inflation discussions, highlighting the ECB's monetary policy strategies.
    Francois Villeroy discusses ECB's neutral rate and inflation trends - Global Banking & Finance Review
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    Quick Summary

    ECB aims for neutral rate by summer if inflation is controlled, says Villeroy. Euro zone inflation trends towards target despite recent uptick.

    ECB Targets Neutral Rate by Summer, Says Villeroy

    PARIS (Reuters) - The European Central Bank's interest rates should reach the point where they are no longer a drag on growth by this summer if inflation is tamed by then, ECB policymaker Francois Villeroy said in a speech on Wednesday.

    Inflation in the 20-nation euro zone eased over the course of last year towards the ECB's 2% target, but ticked higher to 2.4% in December from 2.2% in November, which Villeroy said was largely expected.

    "If the pullback in inflation is confirmed in the coming quarters as we expect, common sense would have us heading towards the neutral rate without slowing the pace by summer," Villeroy said in a New Year's address at the French central bank, which he heads.

    The ECB estimates the so-called neutral rate is around 2%.

    (Reporting by Leigh Thomas; Editing by GV De Clercq)

    Key Takeaways

    • •ECB aims to reach neutral rate by summer.
    • •Inflation in euro zone slightly increased in December.
    • •Neutral rate estimated around 2% by ECB.
    • •Villeroy expects inflation pullback in coming quarters.
    • •ECB's interest rates should not hinder growth by summer.

    Frequently Asked Questions about ECB could reach neutral rate by summer, Villeroy says

    1What is the main topic?

    The article discusses the ECB's aim to reach a neutral interest rate by summer if inflation is controlled.

    2What is the neutral rate?

    The neutral rate is the interest rate level where it neither stimulates nor slows economic growth, estimated around 2% by the ECB.

    3Who is Francois Villeroy?

    Francois Villeroy is an ECB policymaker and head of the French central bank.

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