Former ECB President: Fed did a good job in fighting inflation

Former European Central Bank President Jean Claude Trichet answered Bloomberg’s questions.

Trichet said that the markets expect another interest rate cut from the European Central Bank and that his own expectation is in line with the markets, “The markets are pricing a 25-50 basis point interest rate cut. It was very important to raise interest rates when inflation rose. The European Central Bank should still be cautious. Core inflation is not coming down at the same pace as headline inflation.”

Trichet also emphasized that the Fed has done a good job in fighting inflation.

On Asian economies, Trichet said, “For a long time there were anomalies on the carry trade side in Japan. There is a possibility that China could be hurt by fund outflows from the US.”