Trichet: Central banks face "unprecedented" economic uncertainty
The outlook for the global economy and what should be done by policymakers in coming years is marked with an unprecedented amount of uncertainty, European Central Bank President Jean-Claude Trichet said Friday, dpa reported.
Trichet suggested he was opposed to new government stimulus measures and warned that governments must already begin getting control of their skyrocketing budget deficits, despite fears that the global recovery is weakening.
Speaking at an annual conference of central bankers in the US state of Wyoming, Trichet gave no indications of what the European Central Bank planned to do at its upcoming rate-setting meeting next week but warned of a difficult climate ahead.
"Central bankers have to take decisions in an environment marked by a degree of uncertainty in the economic and financial sphere that seems to me largely unprecedented," Trichet said, according to a text of his prepared remarks.
Trichet said he was "skeptical" of the argument that the global economy was too fragile for governments to begin cutting back on public spending. The idea that governments could live with high debt levels "would be very dangerous for our economies."
Earlier Friday, Federal Reserve Chairman Ben Bernanke told the same conference that the US central bank "will do all that it can to ensure continuation of the economic recovery."
Bernanke acknowledged that the US economy had slowed in recent months but said he expected "modest" growth in the second half of 2010 before a "pickup" in economic output in 2011.