Finally, some responsible Central Banking. He gets a free look into the mess the Fed made and doesn't want the same heat. It will be interesting to watch this unfold. The English caved last night but that doesn't matter much in the grand scheme other than to those who believe a global interest rate decrease in coordination with all the world's Central Banks will start soon. I guess Trichet didn't get the fax. This news should be perceived negatively for US equities although it was widely expected. -Best, Mr Mortgage
Trichet Not Ready to Cut Rates Even as Risks Mount (Update3)
By Christian Vits
April 10 (Bloomberg) -- European Central Bank President Jean- Claude Trichet signaled he's still not ready to cut interest rates even as the credit squeeze poses a greater threat to economic growth than policy makers anticipated.
``We are experiencing a rather protracted period of temporarily high annual rates of inflation,'' Trichet said at a press conference in Frankfurt today after the ECB kept its key rate at 4 percent. While financial-market tension may have ``a broader than currently expected impact on the real economy,'' ensuring price stability is ``very serious for us,'' he said.
The Bank of England lowered its benchmark rate a quarter- point today and the Federal Reserve has slashed its benchmark after the U.S. housing slump pushed up the cost of credit worldwide. With euro-region inflation running at the fastest pace in almost 16 years, the ECB is reluctant to follow suit.