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Trichet Set for ‘Hefty’ Rate Increase Cycle, Investors Say

European Central Bank President Jean-Claude Trichet says he isn’t embarking on a series of interest-rate increases. Investors don’t believe him.

ECB policy makers meeting in Frankfurt today will raise the benchmark interest rate to 1.25 percent from a record low of 1 percent, according to all 57 economists in a Bloomberg News survey. When Trichet flagged the move on March 3, he said it’s “certainly not the start of a series.” Investors are nevertheless betting on two more increases to 1.75 percent by the end of the year, Eonia forward contracts show.