UPDATE - ECB/Villeroy: Potential U.S. Tariffs Will Not Significantly Alter Inflation Outlook

Forex - The Governor of the Bank of France and member of the ECB Governing Council, Francois Villeroy de Galhau, stated that the high tariffs imposed on imports from the United States are unlikely to have a significant impact on inflation in the Eurozone, and that the European Central Bank should continue to reduce borrowing costs.

Villeroy mentioned that the potential tariffs from the U.S. would likely have a modest effect on inflation rates in the Eurozone, while economic growth expectations could weaken. He noted, "The risk balance regarding growth and inflation is indeed shifting downwards, and any potential U.S. tariffs are not expected to significantly alter the inflation outlook in Europe."

He emphasized that the central bank should continue to lower key interest rates, but this should be done at a pace determined by "agile pragmatism." Villeroy concluded, "The victory against inflation in Europe appears to be in sight. Looking ahead, in my view, the path is clear - we should continue to reduce the degree of monetary policy constraints."