During the press conference that follows ECB's rate decision, President Juan Claude Trichet surprised market's by declaring that the bank may raise hikes as soon as April, but not certain. Trichet said in regards of rates outlook that the decision to keep rates was Unanimous, adding that I would also say we are mentioning that we are in a posture of strong vigilance. My understanding of the position of the governing council from the past is that when we use such a word, an increase of interest rate in the next meeting is possible.

Trichet noted that inflation outlook have moved to the upside where the ECB is prepared to act in firm and timely manner in regards of handling inflation levels, but again he assured that prices reflect higher commodity prices.

As for growth, Trichet expressed that the outlook is Broadly balanced while providing outlook projections by ECB members. In regards of growth, the staff projects that 2011 GDP growth will range of 1.3 percent to 2.1 percent, 2012 GDP growth in the range of 0.8 percent to 2.8 percent.

As for inflation outlook, the outlook has shifted to the upside where the staff sees 2011 inflation in range of 2 percent to 2.6 percent, 2012 inflation at 1 percent to 2.4 percent. Trichet added that It is paramount that the rise in inflation doesn't lead to second-round effects, Where Inflation expectations in the medium term must remain fully anchored.