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HomeUncategorizedWhen this happens, the rate is cut closely.

When this happens, the rate is cut closely.

Second François Villeroy de GalhauA member of the Governing Council, the ECB will “almost certainly” cut. Interest rate during the October meeting. The French central bank governor said in an interview with La Repubblica that inflation fell below the 2 percent target in September, and the core measure of price increases is expected to gradually approach that level through 2025.

Valroy’s words on rate cuts

Villeroy de Galhau also pointed out that market expectations for inflation in 2025 are below 1.8%, below the ECB’s forecasts. “All this indicates that the balance of risks is shifting,” he said. Growth and a restrictive monetary policy have not been able to reach this goal for too long.

Shortly after the September 12 meeting, Valroy said policymakers should continue to follow suit. gradual approach, Be careful not to over or under.2 percent inflation target. After the September meeting, data showed inflation below 2 percent for the first time in more than three years, with polls pointing to a deterioration in economic activity. Currently, investors estimate a 90% chance of a rate cut in October.

A new rate cut, the third in 2024 (after June and September), is now approaching. The impression is so strong that investors now rate a 90% chance of a cut announcement at the meeting. October 17, Where the ECB Governing Council will meet in Slovenia. As highlighted by Bloomberg, even economists who previously expected the same move in December are revising their forecasts, such as Morgan Stanley, Barclays and Goldman Sachs. “If inflation stabilizes around 2% next year and with the prospect of slower growth in Europe, there will be no reason to maintain a tight monetary policy,” Valroy added.

What did he say about the Unicredit-Commerzbank merger?

In response to an operational question Unicredit-Commerzbank, Villeroy de Galhau said: “This should not be a political or nationalistic issue in any country. Fortunately, thanks to the banking union, the decision-making process is in the hands of a European body with an independent and technical review. That is, the ECB. Second, the ECB – it observes – will have to judge not only the agreement itself, with its challenges and its financial implications, but above all, the strength, sustainability and governance of a potential new group. “

The Commerzbank acquisition has been roiling the financial waters for weeks. A new and revealing number came out today from the newly appointed CEO of German conglomerate Bettina Orlop, who explained how the merger of the two big banks would go. Extremely difficult And, even if it looks good on paper, that doesn’t mean it will be well executed” and “can successfully create value” for shareholders.

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