- The ECB has won the fight against inflation
- Inflation is not very low in France
- French inflation falling due to temporary factors
- The decision to leave early is a personal one
Villeroy of the ECB
Villeroy is the governor of the French central bank and is generally considered a dove, although he changed his stance to neutral several months ago, like most other ECB policymakers.
The fact that he is downplaying below-target inflation in France is a strong confirmation of his neutral stance and the overall ECB’s wait-and-see approach to interest rates policy.
The ECB has been the most successful central bank in bringing inflation to target without causing pain to the economy. In fact, core inflation is now slightly above the 2% target and the unemployment rate remains at a record low. Moreover, given prior rate cuts and increased fiscal spending, economic activity continues to grow.
Villeroy recently announced that he will step down in June for personal reasons, a year before his term ends, but this will certainly have no impact on ECB policy.
