ECB Eyes Further Rate Cuts Amid Energy Market Volatility

The European Central Bank is considering additional interest rate cuts amidst significant energy market volatility, according to policymaker Francois Villeroy de Galhau. He shared these insights during an interview with the Financial Times, emphasizing that inflation expectations in the current market remain moderate.

Villeroy, who also serves as head of the Bank of France, spoke prior to U.S. President Donald Trump's announcement of a ceasefire agreement between Israel and Iran. This geopolitical development might prompt the ECB to adjust its monetary policy more accommodatively in the next six months.

The ECB's potential interest rate adjustments are aimed at supporting economic stability in the region. Any decision taken would likely favor a reduction in rates, Villeroy commented last week, considering the evolving conditions and geopolitical factors at play.

(With inputs from agencies.)