ECB Rate Cuts: 'Reasonable' Market Expectations, Says Policymaker

ECB policymaker Francois Villeroy de Galhau mentioned that market expectations for future interest rate cuts by the European Central Bank are 'rather reasonable.' The ECB kept rates unchanged but sees the path to potential cuts feasible in upcoming meetings, while targeting a 2% inflation rate by next year.

ECB policymaker Francois Villeroy de Galhau affirmed that market expectations for future interest rate cuts by the European Central Bank are 'rather reasonable,' in a French radio interview on BFM Business.

The ECB maintained interest rates on Thursday but signaled that September's meeting is 'wide open.' Villeroy indicated he finds market expectations of potential rate cuts in September and December to be sensible.

Markets anticipate nearly two rate cuts for the remainder of the year and as many as five by the end of next year, with no policymakers challenging this view in recent weeks. 'We're on track for our 2% inflation target next year,' Villeroy emphasized, calling it not just a forecast but a commitment.