The European Central Bank (ECB) needs another significant interest rate hike in September and should hit the 'neutral' level before the end of the year, French central bank chief Francois Villeroy de Galhau said on Saturday.
Francois Villeroy de Galhau, Governor of Banque de France, attends the Paris Europlace International Financial Forum in Paris, France, July 12, 2022. REUTERS/Benoit TessierJACKSON HOLE, Wyo., Aug 27 - The European Central Bank needs another significant interest rate hike in September and should hit the "neutral" level before the end of the year, French central bank chief Francois Villeroy de Galhau said on Saturday.
Considered a centrist on the bank's rate-setting Governing Council, Villeroy said that rates should keep rising until the ECB hits the neutral level, which is somewhere between 1% and 2%. At the neutral rate, the central bank neither stimulates nor holds back growth."We could be there before the end of the year, after another significant step in September," Villeroy told the U.S. Federal Reserve's Jackson Hole Economic Symposium.
Specific forward guidance, as provided for years, is now viewed as unadvisable given global economic uncertainties.
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