ECB’s Villeroy: Upcoming meeting decisions will be entirely data driven

• Need to be pragmatic and keep an open mind
• Perseverance is now key given the time needed for full transmission of policy
• French inflation is falling even without a recession
• Our growing confidence in inflation moving towards the 2% target is based on good transmission of policy

Well, I’d like to chip in by saying that base effects are also playing a role in bringing headline annual inflation down in the past few months. It’s funny that Villeroy doesn’t highlight this as core annual inflation is still relatively high, all things considered. It just seems typical that central banks will spin the narrative however they want to fit with what they need to say at the point in time.