ECB's Villeroy: "Patience is more important than raising rates further”

<p>Bank of France President Francois Villeroy de Galhau emphasized that he is in no rush to raise rates further after hiking to 4.00% last week.</p><p>“From today’s perspective, patience is more important than raising rates further,” he told <a href="https://www.bloomberg.com/news/articles/2023-09-23/ecb-s-villeroy-says-fuel-jolt-won-t-affect-2-inflation-in-2025#xj4y7vzkg" target="_blank" rel="nofollow">Bloomberg</a>.</p><p>He was quizzed on whether rising oil prices could jeopardize the central bank's inflation forecasts, which call for $77.90 in 2025. He said they are "very attentive" to oil but it "doesn’t put into doubt the underlying disinflation."</p><p>If anything, rising oil prices now could help the ECB hit 2% inflation in 2025 as the y/y comps will be more favorable if we go into 2025 with a higher oil price benchmark. The risk would be that the pressure from high oil forces the ECB to hike again late this year or in 2024.</p><p>For now, the trend is a lower EUR/USD as a further hike from the Fed looks more likely than an ECB hike.</p>

This article was written by Adam Button at www.forexlive.com.