Finance
ECB's Villeroy: there is still gradual margin for rate cuts
Published by Global Banking & Finance Review®
Posted on April 28, 2025
2 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 28, 2025
2 min readLast updated: January 24, 2026
ECB's Villeroy suggests there is room for gradual rate cuts in Europe as euro-zone inflation decreases, despite global economic uncertainty caused by U.S. tariffs.
PARIS (Reuters) -U.S. President Donald Trump's tariff threats are creating uncertainty for economies around the world but there is still margin for further interest rate cuts in Europe as inflation in the euro-zone heads lower, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Monday.
"We are in a moment of great uncertainty ... Mr Trump's polices are not working. The policies of this Trump administration are playing against the U.S. economy and unfortunately also against the world economy," Villeroy - who is also head of the Bank of France - told RTL Radio.
Noting that some economists were even expecting a recession in the United States, Villeroy added: "Protectionism does not work, it means less growth and more inflation."
Villeroy reaffirmed that he saw no recession risk in France or in Europe, as inflation continued to decline.
"We still have a gradual margin for rate cuts," he said.
ECB policymakers are becoming increasingly confident about cutting interest rates in June as inflation continues its march lower, but there is little to no appetite for a big move, six sources told Reuters last week.
The ECB trimmed its benchmark rate to 2.25% earlier this month.
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta)
The main topic is the potential for further interest rate cuts in Europe as discussed by ECB's Francois Villeroy amid global economic uncertainty.
Trump's tariffs create uncertainty, potentially leading to less growth and more inflation globally.
According to Villeroy, there is no recession risk in France or Europe as inflation continues to decline.
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