Villeroy: Markets May Have Overreacted to ECB

Investors may have over-reacted to what they see as a hawkish pivot from the European Central Bank, Bank of France Governor Francois Villeroy de Galhau said.

French President Emmanuel Macron’s price caps to stop a cost-of-living crisis colliding with April’s elections will slow inflation by about one percentage point at the start of 2022, according to Insee.

The government has earmarked 15.5 billion euros ($17.7 billion) to curb the impact of inflation for households, most of which for mechanisms to limit the effect of surging natural-gas and electricity prices.

To deliver the price caps, Macron’s government has also forced state-controlled Electricite de France SA to sell more power at a discount.