France's central bank head Francois Villeroy de Galhau pushed back on Sunday against a suggestion from some French economists to raise the European Central Bank's (ECB) 2% inflation target.
Villeroy, who sits on the ECB's governing council, also said that its interest rate hikes were close to topping out and that rates would be kept at elevated levels long enough for the impact to feed through the economy.
Former IMF chief economist, Frenchman Olivier Blanchard, has long called for a higher inflation target than the 2% shared by most major central banks, arguing that the increased flexibility that would provide would outweigh the costs. In response, Villeroy said that a higher inflation target was a "false good idea" and would lead to higher rather than lower borrowing costs.
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