(Bloomberg) -- The European Central Bank should continue to cut interest rates to reach 2% by the summer as the battle against inflation is practically won, Governing Council member Francois Villeroy de Galhau said.
Most Read from Bloomberg
The French central bank chief said the neutral rate — a theoretical level that neither stimulates nor restricts the economy — is around 2% for the euro area, while the ECB’s deposit rate is currently at 3% even after three consecutive cuts of 25 basis points.
“If the retreat of inflation is confirmed in the coming quarters as we forecast, it makes sense to go toward this 2% rate by next summer without slowing the pace,” Villeroy said at a hearing of the finance committee at France’s Senate on Wednesday.
“This will support the financing of the economy and the decline in the household savings rate,” he added.
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.