Trichet Says Flexibility Is Implicit in ECB’s Forward Guidance

Former European Central Bank President Jean-Claude Trichet said his successor Mario Draghi’s pledge to keep interest rates low contains implicit flexibility to move if circumstances change.

“You cannot exclude to move because you might have to move,” Trichet said in an interview in Aix-en-Provence, France. “In any case, it’s always conditional because nobody can think for one second that you would hesitate to move rates in any direction if there is a case to do that. Implicitly forward guidance remains conditional in the eyes of market participants.”