ECB's Trichet Dashes Rate-Cut Hopes
As expected, the Bank of England and the European Central Bank left their respective benchmark interest rates unchanged at their Mar. 6 policy meetings. The ECB's press conference after the announcement confirmed Action Economics' assessment that the central bank is not ready to consider rate cuts yet and remains focused on inflation risks, even though the bank's bias toward tightening rates has clearly disappeared, and the ECB now has a neutral policy stance. The news disappointed those in financial markets looking for quick cuts. ECB President Jean-Claude Trichet also remained reluctant to comment on the strength of the euro.
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