Villeroy de Galhau and Fischer express caution over inflation target change
French governor and predecessor see dangers in raising inflation targets
Hasty changes to inflation targets could damage central banks' credibility and the "expectation channel" of monetary policy, the new Banque de France (BdF) governor told a seminar in Paris.
François Villeroy de Galhau noted several economists have recently advocated changing inflation targets, but "in different directions". The current macroeconomic environment is very uncertain, he said. In that situation, it is "important" to be "clear and predictable in order to reduce this uncertainty".
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