Home/Newsfeed

Trichet to Fed: Ignore the IMF, World Bank

Share Print 0

With just two days to go for the Federal Reserve’s highly anticipated interest rate decision, former European Central Bank (ECB) President Jean-Claude Trichet has a message for chair Janet Yellen – ignore the International Monetary Fund (IMF) and World Bank’s warnings around the dangers of monetary tightening and keep all options on the table.

“The Fed has to be independent of the self-appointed good advisers,” Trichet told CNBC on Tuesday. “It is part of the credibility of the monetary policy.”

In early September, both the World Bank and the IMF cautioned the U.S. central bank against raising rates until the world economy was on a surer footing. Their warnings followed a summer of turmoil in global markets, triggered by jitters over China’s deteriorating economic outlook and the prospect of higher borrowing costs in the world’s largest economy.

“They can give good advice on a more medium term basis, but not on a precise decision at a certain moment,” Trichet said. “I really think it is not their mandate, to do that.”

If the Fed does decide with “lift-off” this week, it shouldn’t catch anyone off guard, he added.

“They were, in my opinion, very clear in warning the market that an increase of rates was likely, so nobody would say in the market that they were not warned in advance.”

CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
, , ,
Back to Top