European Central Bank May Further Ease Interest Rates

PARIS (Reuters) – The European Central Bank (ECB) is likely to further ease interest rates next year, according to ECB policymaker and Bank of France head Francois Villeroy de Galhau, who spoke on Friday.

"There will be further rate cuts next year," Villeroy stated during an interview with BFM business radio.

He emphasized that there is no predetermined path for future rates but noted that the ECB feels "collectively rather comfortable" with the market's interest rate forecasts for the upcoming year.

Recently, the ECB reduced interest rates for the fourth time this year. In light of ongoing political instability in the euro zone and potential trade tensions with the U.S., the ECB remains open to further easing measures.

On Thursday, the ECB announced a rate cut of 25 basis points, lowering the deposit rate to 3%, which serves as the benchmark for borrowing costs across the 20-nation currency bloc.

Additionally, the ECB has removed a previous reference to maintaining restrictive interest rates, which economists interpret as an indication that further easing could occur as early as January, with inflation projected to align with the ECB's 2% target by early 2025.