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Tuesday, February 09, 2010

ECB Trichet: No Feasible to Target Inflation on Short-Term Basis

By Iain McDonald

Dow Jones Newswires

SYDNEY--European Central Bank President Jean-Claude Trichet said Tuesday that keeping a lid on inflation expectations remains a key goal for policy makers, particularly during turbulent times.

"Keeping inflation expectations anchored remains of paramount importance, under exceptional circumstances even more than in normal times," Trichet said in remarks to a Reserve Bank of Australia 50th anniversary symposium. "Our framework has been successful in this regard thus far."

"We are emerging from the uncharted waters navigated over the past few years. But as central bankers we are always faced with new episodes of turbulence in the economic and financial environment," he said in the remarks, which were largely historical and academic.

"While we grapple with how to deal with ever new challenges, we must not forget the fundamental tenets that we have learned over the past decades," he said.

Trichet also reiterated that it isn't feasible in policy making to target inflation on a short-term basis.