ECB Member: Lowering interest rates will prevent a scenario of a sharp decline in the economy

Villeroy de Galhau, a member of the European Central Bank and Governor of the Bank of France, said that core inflation has declined at an accelerated pace but is still very high.

According to Reuters, Galhau added: It seems that we are close to achieving the European Central Bank’s inflation target of 2%, indicating that they need to obtain guarantees against the scenario of a sharp decline in the economy by reducing interest rates.

He pointed out that the decision to first cut interest rates should be made in the spring, completely independent of the time frame of the US Federal Reserve.

He stated that it is possible that the European Central Bank will begin reducing interest rates at a moderate pace at first, stressing that they do not have to reduce interest rates at every meeting.