European Central Bank member: Reducing interest rates at the October meeting is a strongly considered option on the table.

The policy maker at the European Central Bank and Governor of the French Central Bank, François Villeroy de Galhau, stated yesterday, Sunday, that the European Central Bank may lower interest rates in the October meeting due to weak economic growth.

In addition, Villeroy addressed the following points:

• Economic growth is weak, which may increase the risks of inflation falling below the European Central Bank's target of 2%.
• In the past two years, the main risk was overshooting the European Central Bank's inflation target, and now we must also pay attention to the opposite risks, which are not meeting our target due to weak growth and overly tight monetary policy for too long.
• The central bank should return to the neutral rate at some point during 2025.
• If inflation stabilizes at the 2% level sustainably next year; and with continued downturn in growth expectations within Europe; there will be no reason for the European Central Bank's monetary policy to remain restrictive, and for rates to be higher than the neutral interest rate.