Trichet Says Bank Doesn’t Want to Be Trapped |

Trichet Says Bank Doesn’t Want to Be Trapped

By Gabi Thesing

Dec. 4 (Bloomberg) — European Central Bank President Jean- Claude
Trichet signaled he’s reluctant to cut interest rates so low that
policy makers are “trapped” with few options to respond to a deepening
recession.

“We have to beware of being trapped at nominal levels that would be
much too low,” Trichet said at a press conference in Brussels today.
The ECB earlier lowered its benchmark by three quarters of a
percentage point to 2.5 percent, the biggest cut in its ten-year
history.

Trichet’s comment “suggests to us that the ECB will be unwilling to
cut by that amount again any time soon,” said Jacques Cailloux, chief
European economist at Royal Bank of Scotland Plc in London. “The ECB
does not see scope for further deep cuts in rates along the lines of
the Fed.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=akTX_f3XmXiI&refer=home#

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