ECB's next move will be a difficult one - by Carter Dougherty
A war of nerves has developed between the European Central Bank and financial markets, which now see a reduced likelihood that the bank will carry through with a planned increase in borrowing costs in September after the Federal Reserve surprised markets Friday by cutting a key interest rate.
The bank's president, Jean-Claude Trichet, hinted earlier this month that he would lift interest rates again to cool inflation from an expanding economy, a stance he appeared to reaffirm earlier this week by declaring that the period of recent financial market turmoil was largely over.
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