Ultra-low rates are a thing of the past: ECB’s Villeroy

Bloomberg

The European Central Bank (ECB) won’t need to return to ultra-low interest rates as inflation will settle in a new regime close to its 2% medium-term target, according to Governing Council member Francois Villeroy de Galhau.
“I personally believe that once we will have fought inflation and come back to 2% we will be in a new inflation regime, probably closer to our target,” the Bank of France Governor said. “Then we will have probably in the medium term a level of interest rate that will be more normal than in the recent past.”
Addressing an online conference, Villeroy said that in the shorter term the ECB will focus on tackling underlying inflation, which is “much too high.”
“Monetary policy has to act and monetary policy is able to act to counter the rise in underlying inflation,” Villeroy said.