ECB’s Villeroy: ECB can cut interest rate independently from Fed

François Villeroy de Galhau, the governor of the Bank of France and an ex officio member of the European Central Bank, emphasised on Tuesday that the ECB’s pragmatism about rate decreases is independent of Federal Reserve policy.

Villeroy’s remarks follow the Bank of France’s revision of its first-quarter growth estimate for France, which was previously predicted to be between 0.1-0.2%.

Villeroy stated to Le Figaro on Tuesday that the ECB has the authority to set interest rate decreases without regard to the actions of the US central bank.

The ECB is “free and pragmatic” when it comes to the timing and tempo of rate reductions, the central banker emphasized.

Villeroy also restated the ECB’s overall consensus to begin reducing interest rates in the spring as inflation approaches the 2% target level.

Key Quotes

ECB rate cuts are independent of the Fed’s policy.

The ECB can be free and pragmatic on the pace of rate cuts.

The ECB is broadly in agreement about delivering rate cuts in the spring.