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MNI BRIEF: Rate Path Adjustment On Disinflation Outlook-Villeroy

Bank of France head speaks after ECB cut rates for first time since 2019.

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The ECB will adjust the precise path of its future rate cuts as the outlook for disinflation is confirmed, Bank of France Governor Francois Villeroy said in a statement Friday, as he noted that the current level of rates was "still significantly above the neutral level" after Thursday's reduction and would continue to bring down inflation.

The cut Thursday, when the ECB reduced the deposit rate to 3.75%, demonstrated the ECB's confidence in the ongoing "soft landing" in the euro zone economy and while there would be monthly fluctuations through to the end of this year these would be "largely due to energy-related base effects". (see MNI SOURCES: September Rate Cut In Sight For ECB)

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The ECB will adjust the precise path of its future rate cuts as the outlook for disinflation is confirmed, Bank of France Governor Francois Villeroy said in a statement Friday, as he noted that the current level of rates was "still significantly above the neutral level" after Thursday's reduction and would continue to bring down inflation.

The cut Thursday, when the ECB reduced the deposit rate to 3.75%, demonstrated the ECB's confidence in the ongoing "soft landing" in the euro zone economy and while there would be monthly fluctuations through to the end of this year these would be "largely due to energy-related base effects". (see MNI SOURCES: September Rate Cut In Sight For ECB)

Keep reading...Show less