German, French Central Bankers Say Inflation Will Return to Goal

The European Central Bank wants to bring record inflation back to 2%.

The president of the Bundesbank and the governor of the Bank of France said in a television interview that the European Central Bank will eventually tame price growth that is five times its goal.

Villeroy said they would bring inflation back to 2% by the end of the century. This isn't just a forecast. A commitment is what it is.

The next policy meeting of the European Central Bank is less than two weeks away. The officials are expected to raise the interest rate and agree on a plan to reduce the amount of bonds on the balance sheet.

Several officials are undecided between a 75-basis point move and a half point step. The decision will be based on the most recent data.

For the first time in the history of the year, we will have new projections for 2020. The decision will be based on this. Rate increases need to continue.

Villeroy said that borrowing costs will rise for as long as needed.

The use of hundreds of billions of euros by governments to shield companies and households from rising energy costs may undermine efforts to stamp out inflation. They called for a return to more balanced budgets.

At some point it is over for a special situation. He said that the signal from fiscal policy should be a return to the debt brake.