Is the Free Money Over in Europe?
How much would everyone out there like to bet that the ECB doesn't do a thing? These threats are meaningless without real punishments behind them, like rate hikes and a deadbolt on the free money window. Wanna pull it out, Trichet? We're waiting! Until then, get your hand out of your pocket.
The European Central Bank signaled Thursday that euro-area borrowing costs could rise next month from their current record-low level as a result of increasing inflation pressure.
‘‘An increase in interest rates at our next policy meeting is possible,’’ Jean-Claude Trichet, the E.C.B.’s president, said during a press conference in Frankfurt. He stressed that such an increase was not certain and would not necessarily signal the ‘‘start of a series of interest rate increases.’’
Nick Kounis, head of economic research at ABN AMRO in Amsterdam, said: ‘‘This is about as clear a signal of a rate hike that you are going to see from a central banker.’’
What the hell is he doing?
Well I'll tell you what he's doing, he's doing what Bernanke should be doing instead of overexplaining how high commodity prices hurt our recovery and blaming China.
The euro climbed to almost four- month highs versus the dollar and yen after European Central Bank President Jean-Claude Trichet said the ECB may raise interest rates next month to counter accelerating inflation.
“Strong vigilance is warranted,” Trichet told reporters in Frankfurt after the central bank left its main refinancing rate at 1 percent as predicted by all 53 economists in a Bloomberg News survey. The Swiss franc declined earlier as a report showed the country’s retail sales slumped in January.
The euro zone has had a good run but now it's time to get back to reality and be diligent. Isn't that right, J-C T?
You hear that, ZB? He's out.