ECB May Ease Pace of Interest Rate Hikes in 2023, Villeroy Says

The European Central Bank should continue raising interest rates by large increments at its meetings in October and December before reassessing and possibly shifting to a slower pace, Bank of France Governor Francois Villeroy de Galhau said.

The ECB has taken an aggressive stance against inflation at recent meetings, hiking by 125 basis points in two steps in July and September. Villeroy has supported the hawkish moves and backs further increases to get the deposit rate from 0.75% to “below or close to” 2% by the end of the year -- a level he says is a neutral setting. Beyond that, he is urging more caution.