French ECB Governing Council member Francois Villeroy de Galhau shared his outlook on inflation and global growth risks today with France Inter, suggesting a period of moderate inflation within France alongside more rate cuts from ECB. He also projected that France’s unemployment rate could temporarily increase to around 8% before stabilizing back to 7%.
Villeroy raised concerns over the inflationary impact of US President-elect Donald Trump’s proposed economic policies, specifically warning that Trump’s program “risks bringing back inflation to the United States.” He suggested this could slow global growth, although the full extent of this impact remains uncertain and could vary between the US, China, and Europe.
A particular focus of Villeroy’s remarks was on Trump’s proposed tariffs, which aim to eliminate the US trade deficit by imposing a 10% or higher tax on all imported goods.
Villeroy argued that such protectionist policies could ultimately hurt US consumers, noting, “Protectionism almost always means reduced purchasing power for consumers.”
