Word: trichet
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...early-morning announcement by the British government that it had crafted a $90 billion rescue package for its banks. Then five central banks from around the world, including the two big ones - the U.S. Federal Reserve and the European Central Bank - announced a cut in interest rates. Jean-Claude Trichet, president of the European Central Bank, described the cuts as an "important mark of confidence" that showed an "intimate cooperation" among monetary authorities around the world. Under normal circumstances, such measures would have bucked up moods and stock prices in financial centers across the globe...
...Inflation When Jean-Claude Trichet, the president of the European Central Bank (ECB), announced a 0.25 percentage point increase in Europe's key lending rate on July 3, he contended that it was critical to stave off the so-called secondary effects of inflation and "to neutralize the growing risks to price stability." In plain English, that means he's worried about an inflationary spiral in which manufacturers of industrial and consumer goods raise prices to compensate for higher costs - and workers demand hefty pay increases so they can afford the rising cost of their household purchases. The risk...
...Trichet's critics, including French President Nicolas Sarkozy, say it makes no sense for the ECB to raise interest rates to fight frothy commodity-market prices, and Trichet himself signaled that the bank isn't planning any more rate hikes in the near future. But surging inflation poses a huge threat to Europe's chances of beating the downturn, especially when combined with weak growth. Inflation is perhaps the trickiest economic indicator to forecast: for example, over the past year, the ECB's staff has based each of its inflation projections on an assumption that oil prices will stabilize...
French officials have gone so far to suggest they'd invoke an article of the treaty the euro was founded upon allowing national governments to impose policy regarding currency exchange on the ECB. True to form, ECB president - Frenchman Jean-Claude Trichet - remains singularly unimpressed by the pressure from politicians. In an interview with the weekly Le Point Thursday, Trichet admitted being "worried by the excessive exchange rate movements". But he reiterated his inflation-fighting position that "we'll take the necessary decisions to insure price stability in the medium-term [which] is what our mandate is" - and not cave...
Meanwhile, Trichet - who in the past has been critical of Washington's uninterest in the negative consequences of its economic and monetary policies for other countries - said he'd "noted with great attention the re-affirmation of American authorities... that a strong dollar was in their economic interest." A good sign, indeed. The Bush administration once saw the decline of the dollar as a boon to U.S. industry. But with investors continuing to bail on U.S. securities and monetary markets Thursday, the question now is whether American intervention alone can turn things around - or whether European politicians and central bankers...