2018.05.1423:20:00UTC+00Villeroy Says ECB Nearing End of QE

European Central Bank official Francois Villeroy de Galhau indicated that he expects the central bank's quantitative easing to reach its conclusion this year and an interest-rate increase could follow in 2019.

In an interview in Paris, the French policy maker said inflation will continue its acceleration in the following months, with underlying price pressures slated to gain momentum. Other central bankers who gave speeches on the same day underlined that they are observing to see if the economy can shake off its weak start to the year.

During a Bloomberg TV interview, Villeroy said the ECB could say a rate hike will come after the stopping of net asset purchases by “at least some quarters, but not years”. He said the ECB will potentially give further guidance for the end of the year for the timing of the rate increase and the contingencies.

ECB policy makers are yet to formally talk about the future of their quantitative-easing program. Purchases are currently set to continue until at least September, amounting to more than 2.5 trillion euros and officials anticipate the interest rate to remain at the current record lows until “well past” the conclusion of net buying.

Executive Board member Benoit Coeure reiterated the ECB's commitment on interest rates, but also voiced concern that surplus liquidity may lower the impact of any future interest rate hikes.