“I expect today that we will be at the terminal rate not later than by summer.” European Central Bank (ECB) policymaker Francois Villeroy de Galhau said. At a Bank of France event on Monday, according to Reuters.
ECB Important takeaways
“The primary question today is not how much further to raise rates, but how much of what is already in the pipeline is passed through.”
“In the current ECB tightening cycle, policy transmission lag may be at the upper end of the 1–2-year range.”
“The reduction in rate increases from 50 basis points to 25 basis points was prudent and prudent.”
“We must monitor the passage of our substantial and exceptionally rapid previous hikes.”
“How long we keep rates high is now more important than ever.” the exact final level.”
“We will continue to be data-driven, assessing the outlook for inflation and the strength of monetary policy transmission at each meeting.”
Market’s reaction on Villeroy, ECB statement
After these statements, In the second half of the day on Monday, the EURUSD lost traction and fell towards 1.0800. The cautious market approach helps the US Dollar keep its footing and restricts the pair’s gain as investors await news on debt-limit talks.
