ECB/ Villeroy: Interest rates to peak in next three meetings

“The European Central Bank will hit a peak in interest rates in its next three meetings,” said Francois Villeroy de Galhau, a member of the Governing Council of the European Central Bank (ECB). The European Central Bank is set to hit a peak in interest rates in its next three meetings, according to François Villeroy de Galhau, a member of the Governing Council of the European Central Bank (ECB). The head of the Bank of France said it was “wise and prudent” to slow the pace of increases to 25 basis points this month as authorities monitor the impact of their unprecedented bout of monetary tightening. He reiterated that once the so-called terminal interest rate is reached, the ECB will need to keep borrowing costs there for some time. “We have already completed most of our rate-hiking journey and we are clearly in restrictive territory,” Villeroy said at a symposium of the National Association of Business Economics in Paris on Monday. While most investors and economists see the ECB’s tightening campaign ending in July, policymakers are increasingly signaling the possibility of it extending to the next meeting in September as underlying inflation proves stubborn. President Christine Lagarde said on Sunday that while the ECB has completed most of its inflation-fighting journey, the process is not yet complete and current economic data do not warrant a break.