After the European Central Bank maintained its monetary policy with rates steady at 1.0% as expected, still the focus remained on his remarks, especially as the market was looking for hints over the future monetary policy, and as expected Trichet started his press conference with the usual phrase assure that rates remain appropriate.
In the press conference following the rate decision, ECB President Jean-Claude Trichet said that the current monetary policy remains accommodative and that the ECB has not changed its stance and inflation remained anchored, the thing that surely pressured the euro and disappointed expectations for a stronger rhetoric on inflation. Trichet also said that close monitoring of inflation is warranted though did not signal a strong shift in stance.
Trichet said that the data confirm positive underlining recovery momentum, though the outlook remains uncertain and growth risks remain to the downside. He added that some of the risk is tied to financial markets instability and volatility.
On inflation, risks remain broadly balance, though could move to the upside. He said that inflation might prevail above 2.0% for the coming few months and will go back to target by the end of the year. He added that faster inflation was anticipated and that inflation expectations remain anchored.