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[Quick Facts]

1. Villeroy: ECB rates will remain unchanged for the next few quarters.

2. U.S. Treasury Secretary Yellen: Considerable progress made in reducing inflation.

3. Tax cuts may become the core of British fiscal policy.

4. Fed's Barkin: "Job's not done" on bringing inflation down.

[News Details]

Villeroy: ECB rates will remain unchanged for the next few quarters

The European Central Bank's (ECB) interest rates have reached a plateau where they will likely remain for the next few quarters, said Francois Villeroy de Galhau, ECB Governing Council member and the Bank of France Governor, in a speech on Monday, Nov. 20, dismissing rate cut talk as premature.

The conflict in Gaza and Israel as well as oil market swings were unlikely to derail the fall in inflation, though occasional ups and downs could be expected in the next few months, he said.

The ECB aims to steer euro zone inflation towards its 2% target by 2025, though Villeroy insisted the number was an average and he was not fixated on hitting 2.0% precisely.

In recent months, euro zone inflation has fallen quickly in recent months as the economy has slowed. A "soft landing" seems more likely.

In the future, the ECB might need to bring back some form of forward guidance about its interest rate plans, so long as that does not limit its room for manoeuvre too much. "Central banks should be predictable, but not pre-committed," he said.

U.S. Treasury Secretary Yellen: Considerable progress made in reducing inflation

After the Federal Reserve aggressively raised interest rates to cool price pressures, the CPI fell back from its peak to 3.2% in October, said U.S. Treasury Secretary Janet Yellen in an interview on Monday. We have made "considerable progress" in bringing inflation down while maintaining a strong economy and a robust labor market.

Tax cuts may become the core of British fiscal policy

British Prime Minister Rishi Sunak made a speech on Monday about the UK's economic development plan, pointing out that the UK's future long-term economic development will focus on five goals: cutting tax, reducing debts, sustainable energy, backing British business, and delivering world-class education.

As the British Prime Minister's speech coincided with the government's upcoming release of the Autumn Budget on Nov. 22, the market expects tax cuts to become the focus of attention in this year's British Autumn Budget.

Paul Johnson, director of the Institute for Fiscal Studies, warned that "there is no room" for substantial tax cuts. The public finances are "in a mess" due to debt interest payments, so that the government does not have much room for manoeuvre.

Fed's Barkin: "Job's not done" on bringing inflation down

U.S. economic data show that the economy is expanding, while price growth is slowing, but the progress is not enough for the Federal Reserve to declare victory on inflation, said U.S. Richmond Fed President Tom Barkin on Monday.

I think inflation is stubborn, which gives us a reason to keep it higher for longer, said Barkin. Getting inflation convincingly back to target - that's my goal, he added. We can get to the target in several different ways, but I remain unconvinced that price-setters in the current economy are back to where they were three or four years ago.

This is not a good time to provide forward guidance, and the Fed will respond to the data.

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