François Villeroy de Galhau: Navigating an uncertain world - steering monetary policy in the right direction to hold our course

Ladies and Gentlemen,

Thank you for welcoming me to this institution, where I unfortunately did not study, but where I had the privilege of teaching economic policy for nearly ten years. This evening, I'd like to talk to you about monetary policy: the subject may seem technical – I'll do my best not to be dry and to explain it clearly – but it is undeniably essential. And since we set this date two months ago, monetary policy has once again become a burning issue: at the start of 2026, it was firmly in a good position" of "2+2" – 2% inflation and a 2% interest rate – and was almost boring. But today, the role of a central banker is to make decisions amid uncertainty, to distinguish information from noise, and to remain credible. And it is no small matter to discuss this at Sciences Po, where public policy needs to be both a technical matter and a question of judgement, trust and institutions.

With the war in the Middle East, we are directly faced with an apparently simple question: are we seeing a repeat of 2022, with an energy price shock in the wake of a military attack, followed by a surge in inflation not seen for decades? (I) Then I will turn to an even less simple question: what should we do now? (II) 

I. Why we are not witnessing a repeat of 2022

Are we going through 2022 once again? The answer at this stage is no. But this "no" needs to be explained, as it shapes both our assessment and our course of action. Admittedly, the shock appears to be significant, particularly as regards oil, since the price of gas was lower before the shock of February 2026.