(Bloomberg) -- The European Central Bank isn’t ready to consider lowering borrowing costs now, but will examine the question at some point during 2024, Bank of France Governor Francois Villeroy de Galhau said. 

“Barring any shock, rate hikes are now over,” Villeroy said at a conference near Paris. “The question of a cut may arise when the time comes during 2024, but not now: when a remedy is effective, you have to be patient enough on its duration.”

The French central banker’s comments come after data on Thursday showed a faster-than-expected easing of inflation to 2.4% in November, the lowest reading since mid-2021. In response to that, investors shrugged off comments from hawkish policymakers and increased bets that a first cut in interest rates will come in April.

After Villeroy’s comments on Friday, traders further ramped up rate-cut wagers, putting the chance of a quarter-point decrease by March at 75% from just 10% last week. Money markets are also fully pricing 125 basis points of easing by the end of next year, which compares with just 82 basis points last week.

“This statement reinforces our new scenario — forecasting 125 basis points of rate cuts in 2024 — with the fact that a centrist is not doing a pushback on expectations,” said Theophile Legrand, rates strategist at Natixis SA. “This attests to the credibility of market pricing.”

Villeroy said the euro-zone data shows the process of disinflation “is even faster than expected,” notably in services, according to the comments provided by the Bank of France. 

“There might be a few months of pause, but it supports our forecast for a return of inflation toward 2% by 2025 at the latest, barring external shocks,” he said. 

Last week, before November’s inflation data, Villeroy said the ECB will probably keep borrowing costs at a 4% plateau for “at least the next several meetings and the next few quarters.”

(Updates with market reaction, analyst comment from third paragraph)

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