ECB on inflation, again

Trichet expresses the mainstream view of monetary policy:

“The financial market correction — it’s a very significant correction with turbulent episodes — that we are observing provides a reminder of how a disturbance in a particular market segment can propagate across many markets and many countries, Trichet said in a debate at the European Parliament economic and monetary affairs committee.

But at times of financial turbulence it is the duty of the ECB and other central banks to anchor inflation expectations, he said.

“In all circumstances, but even more particularly in demanding times of significant market correction and turbulences, it is the
responsibility of the central bank to solidly anchor inflation expectations to avoid additional volatility in already highly volatile markets,” he said.