Market Analysis

Francois Villeroy de Galhau, a key policymaker at the European Central Bank (ECB), expressed confidence that despite expected volatility in monthly inflation data this year, the ECB remains focused on achieving its 2% inflation target by next year. 

Following a recent rate cut and amid high wage growth and upward revisions in inflation forecasts, Villeroy noted that the short-term fluctuations in inflation, driven by energy price base effects, are considered insignificant. 

Emphasizing an outlook-driven approach, he highlighted the ECB's cautious optimism about achieving the target smoothly, barring any unforeseen shocks. 

Villeroy also advocated for a gradual stance on future rate adjustments, underscoring that the ECB still has ample room for further cuts before monetary policy becomes restrictive.

Paraphrasing text from "Reuters" all rights reserved by the original author.