BRIEF: ECB Villeroy Says Rates Will Move To Neutral By Summer
Jan-08 19:28By: David Thomas
European Central Bank
ECB interest rates should move towards their neutral rate by the summer, Bank of France Governor Francois Villeroy said tonight.
"If the fall in inflation is confirmed over the next few quarters as we expect, good sense dictates that we move steadily towards this neutral rate by next summer," Villeroy said in his New Year address.
Noting that ECB rates currently at 3% are already well below those of the Federal Reserve and the Bank of England, Villeroy said that this level still remains "significantly above" the neutral rate.
"While this rate is not directly observable, the ECB estimates that it stands at around 2% in the euro area," he said.
