Trump policies may impact EU interest rates – ECB’s Villeroy

By Aya El Sayed On Nov 26, 2024

Bank of France chief and European Central Bank (ECB) policymaker Francois Villeroy de Galhau Credit: Council on Foreign Relations.

The economic policies of President-elect Donald Trump could have a “relatively limited” effect on European inflation but may significantly influence long-term interest rates, European Central Bank policymaker François Villeroy de Galhau said Tuesday.

Speaking at a retail investor conference in Paris, Villeroy, also the head of the French central bank, warned that Trump’s plans for tariff hikes and tax cuts could add to US inflation while dampening global economic growth.

“The inflation effect could be relatively limited in Europe, however long-term interest rates set by the market have a certain tendency to cross the Atlantic,” Villeroy told a retail investor conference in Paris.
“I don’t think it changes much for European short-term rates, but long-term rates could see a transition effect,” he added.

Attribution: Reuters

Subediting: M. S. Salama