European Central Bank Governing Council member Villeroy: Trump's economic agenda will reignite inflation in the U.S. and harm global economic growth
European Central Bank Governing Council member Francois Villeroy de Galhau stated that Trump's economic agenda could reignite inflation in the United States and harm global economic growth. He pointed out that Trump's tariff policies would affect the purchasing power of American consumers, potentially leading to a slowdown in global economic growth. At the same time, Villeroy mentioned that the European Central Bank might further cut interest rates to support the economy, and France's inflation and unemployment rates also show a certain level of stability
According to the Zhitong Finance APP, Francois Villeroy de Galhau, a member of the European Central Bank's Governing Council and the Governor of the Bank of France, stated on Wednesday that the economic agenda of the new U.S. President Trump could reignite inflation in the United States and harm global economic growth.
In an interview, Villeroy said, "The plan has the potential to reignite inflation in the U.S. This could slightly reduce global economic growth. It remains to be seen whether the greater downward pressure will be felt by the U.S., China, or Europe."
It is understood that Trump has proposed the idea of imposing tariffs of 10% or higher on all goods imported into the U.S., claiming that this would eliminate the U.S. trade deficit.
However, Villeroy predicts that U.S. consumers will be the first to be affected by many of these tariffs.
"Protectionism almost always means a decline in consumer purchasing power," Villeroy stated.
Regarding the European Central Bank's policy, Villeroy indicated that further interest rate cuts may be possible in the future, noting that France's current "moderate" inflation of around 1.5% is a sign.
He emphasized that since the current price increase is lower than wage growth, the European Central Bank has room to cut rates to support the economy. Villeroy pointed out that national surveys show that the number of companies planning to lower prices is at least as many as those planning to raise prices, which further alleviates concerns about inflation.
Additionally, he stated that despite recent fluctuations, France's economic growth shows resilience, and he expects inflation to remain stable. He also predicts that the unemployment rate in France may briefly rise to around 8% before falling back to 7%.
The Bank of France released its latest monthly outlook on Tuesday, forecasting that France's economic growth will remain flat in the last three months of this year