Although the ECB Council disappointed markets by cutting rates by a less-than-expected quarter percentage point, to 1.25 per cent, focus centred on M. Trichet's remarks on the possibility of "unconventional measures" when rates eventually do find a floor, which he suggested would be relatively soon. M. Trichet said during the regular press conference that follows every ECB decision that "I would say very candidly as regarding the main policy rate it is not the lowest limit. I do not exclude that we could in a very measured way go down from the present level". He said the ECB's Governing Council would decide whether to take further "non-standard" steps in its monetary policy at its next policy meeting in May."It's an important message that I tell you that the next decision-making rendezvous, we will tell you what has been decided for the non-standard measures."
Although the ECB Council disappointed markets by cutting rates by a less-than-expected quarter percentage point, to 1.25 per cent, focus centred on M. Trichet's remarks on the possibility of "unconventional measures" when rates eventually do find a floor, which he suggested would be relatively soon.
M. Trichet said during the regular press conference that follows every ECB decision that "I would say very candidly as regarding the main policy rate it is not the lowest limit. I do not exclude that we could in a very measured way go down from the present level". He said the ECB's Governing Council would decide whether to take further "non-standard" steps in its monetary policy at its next policy meeting in May.
"It's an important message that I tell you that the next decision-making rendezvous, we will tell you what has been decided for the non-standard measures."
The short-time employment subsidies for a lot of companies are due to run out over the course of the summer, with observers predicting an unemployment surge then. And the Bundestag elections are at the end of September.
If figure Merkel and Steinbrück are going to start getting Keynesainized round about June. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
