December 15 guidance from ECB official

While European markets await the interest rate decision to be announced by the European Central Bank (ECB) on December 15, a clear direction came from ECB Governing Council Member Francois Villeroy de Galhau. European Central Bank (ECB) Governing Council Member Francois Villeroy de Galhau predicted that inflation in the Eurozone would peak in the first half of 2023 and said he was in favor of increasing interest rates by 50 basis points at this month's meeting. Speaking on Sunday, Villeroy predicted that raising the policy rate to 2 percent would be an attractive step. The ECB's next interest rate meeting will be held on December 15. Markets, which previously predicted that the ECB would make its third consecutive 75 basis point interest rate hike, have now shifted their current expectation to 50 basis points. Stating that reaching 2 percent in interest rates will complete the first half of the normalization match, Villeroy reiterated his expectation that interest rate hikes will slow down next year. Croatia’s central bank governor Boris Vujcic, who joins the eurozone in a few weeks, also called for continued monetary tightening. Vujcic, who will become the 26th member of the ECB’s governing council, said “determined monetary tightening must continue.”